{"id":10587,"date":"2022-03-13T22:26:28","date_gmt":"2022-03-13T22:26:28","guid":{"rendered":"http:\/\/egrowonline.com\/?p=10587"},"modified":"2022-03-13T22:26:28","modified_gmt":"2022-03-13T22:26:28","slug":"ethereum-2-0-wont-be-faster-but-itll-be-scalable","status":"publish","type":"post","link":"http:\/\/egrowonline.com\/?p=10587","title":{"rendered":"Ethereum 2.0 Won’t Be Faster, But It’ll Be Scalable"},"content":{"rendered":"


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There\u2019s been some coverage of recent comments by Ethereum creator Vitalik Buterin saying that the second-largest blockchain can\u2019t get any faster than it is now.<\/p>\n

Which seems to contradict what he and all the other top developers on Ethereum 2.0 have been saying for years: That Ethereum 2.0 will be an order of magnitude more scalable than the current blockchain, which has been groaning under the weight of its own success for several years.<\/p>\n

See also:<\/strong> PYMNTS Blockchain Series: What Is Ethereum? The Blockchain That Moved Crypto Beyond Currency<\/a><\/p>\n

So, which one is it? Is the highly touted Ethereum 2.0 stuck at the same speed?<\/p>\n

Technically, yes.\u00a0In reality? No, not at all.<\/p>\n

In the payments industry, speed tends to refer to transactions per second, or TPS. In blockchain, however, \u201cscalability\u201d is the term used to account for TPS. Speed refers to something else entirely: block time.<\/p>\n

Read more:<\/strong> Bitcoin\u2019s 10-Minute Block Time Batches and Fluctuating Transaction Fees Give RTP a Leg Up<\/a><\/p>\n

When Buterin talked about \u201cthe limits on making block time faster\u201d in a recent<\/a> Reddit discussion thread \u2014 which he reposted<\/a> on Twitter \u2014 he was referring to how fast new blocks of transactions are added to the Ethereum blockchain. And that\u2019s a matter that\u2019s more about security than scalability.<\/p>\n

Ethereum\u2019s block time is currently about 13 seconds. And while that\u2019s a whole lot better than Bitcoin\u2019s 10 minutes, Solana, one of the current \u201cEthereum killer\u201d blockchains seeking to steal away developers and projects, has a 400 millisecond block time \u2014 so a new block is added every 0.4 seconds. It also can handle 50,000 TPS.<\/p>\n

Read more:<\/strong> PYMNTS Blockchain Series: What Is Solana?<\/a><\/p>\n

But the ongoing project to convert Ethereum into Ethereum 2.0, built on the greener and far more scalable proof-of-stake consensus mechanism (as opposed to Bitcoin-style proof-of-work mining) will enable it to reach 100,000 TPS.<\/p>\n

Read more:<\/strong> PYMNTS Crypto Basics Series: What\u2019s a Consensus Mechanism and Why Is It Destroying the Planet?<\/a><\/p>\n

Now, block speed is very important to payments, but what it effects is transaction time \u2014 latency \u2014 and final confirmation of the transaction, which is all about security. For all of their vaunted immunity to changing information once it has been recorded, blockchains transactions are vulnerable for a short time after being added to a block. You can see the details in the link below.<\/p>\n

See more:<\/strong> The 51% Attack: Crypto\u2019s Double-Spending Achilles Heel<\/a><\/p>\n

The Blockchain Trilemma<\/strong><\/p>\n

\u201cTrilemma\u201d is a word coined by Buterin to describe a problem with the three core features of a public blockchains: They are decentralized, they are secure, and they are scalable.<\/p>\n

The dilemma part of the word trilemma refers to the widely accepted theory that you must always sacrifice one of those three to strengthen the other two \u2014 thus making blockchain design a balancing act.<\/p>\n

The way to increase decentralization is by adding more nodes \u2014 which have full records of all the transactions on a blockchain. But that means more people who are vying to win the right to validate transactions and add them to the blockchain in exchange for a reward of newly minted coins and transaction fees.<\/p>\n

The way to make a blockchain more secure is to spend more time and effort validating transactions. They must all agree \u2014 reach a consensus \u2014 that a newly written block is accurate; nodes that disagree are forked into separate blockchains. And that takes time.<\/p>\n

Adding scalability means adding more transactions to the blockchain, either by speeding up the block time or increasing the size of each block.<\/p>\n

Here\u2019s the trilemma: The more nodes you have, the more decentralized and secure your blockchain is, but it takes longer for all of them to reach a consensus, hindering scalability.<\/p>\n

Similarly, increasing scalability and decentralization means cutting into the security, as you have to do more validation more quickly, and security will suffer.<\/p>\n

To be more secure and scalable requires reducing the number of nodes and making the blockchain more centralized, as fewer people can reach consensus faster without shortchanging the validation process.<\/p>\n

Proof-of-work blockchains like Bitcoin and the current Ethereum sacrifice scalability, while proof-of-stake blockchains are less secure \u2014 but can be more scalable.<\/p>\n

Buterin\u2019s point is that by adding new blocks more quickly than Ethereum currently does, Ethereum 2.0 would give up too much security.<\/p>\n

How Ethereum 2.0 will scale<\/strong><\/p>\n

Ethereum 2.0\u2019s proof-of-stake consensus mechanism \u201cattempts to give blocks a very high level of confirmation [meaning consensus of validity] and this requires thousands of signatures. \u2026 This process incurs latency and takes time.\u201d<\/p>\n

The way Ethereum 2.0 will get around the trilemma is by sharding \u2014 meaning creating new sidechains that run in parallel with the main blockchain, splitting the load. This lets it process more transactions \u2014 vastly more \u2014 without reducing the number of nodes or rushing the validation security process.<\/p>\n

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\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014\u2014<\/p>\n

NEW PYMNTS DATA:<\/span> ACCOUNT OPENING AND LOAN SERVICING IN THE DIGITAL ENVIRONMENT<\/span><\/strong><\/p>\n

\"\"\"\"<\/p>\n

About: <\/strong>Forty-two percent of U.S. consumers are more likely to open accounts with FIs that make it easy to auto-share their banking details during sign-up. The PYMNTS study Account Opening And Loan Servicing In The Digital Environment<\/strong>, surveyed 2,300 consumers to examine how FIs can leverage open banking to engage customers and create a better account opening experience.<\/p>\n

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There\u2019s been some coverage of recent comments by Ethereum creator Vitalik Buterin saying that the second-largest blockchain can\u2019t get any faster than it is now. Which seems to contradict what he and all the other top developers on Ethereum 2.0 have been saying for years: That Ethereum 2.0 will be an order of magnitude more […]<\/p>\n","protected":false},"author":1,"featured_media":10588,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[38],"tags":[158,3145,6212,3658,130],"class_list":["post-10587","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blockchain","tag-ethereum","tag-faster","tag-itll","tag-scalable","tag-wont"],"jetpack_publicize_connections":[],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"http:\/\/egrowonline.com\/wp-content\/uploads\/2022\/03\/Paradigm-One-ethereum-Coinbase-1000x600.jpg","_links":{"self":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/10587","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=10587"}],"version-history":[{"count":1,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/10587\/revisions"}],"predecessor-version":[{"id":10589,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/posts\/10587\/revisions\/10589"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=\/wp\/v2\/media\/10588"}],"wp:attachment":[{"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=10587"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=10587"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/egrowonline.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=10587"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}