A recent comment by Ethereum creator Vitalik Buterin reports that the second largest blockchain cannot be faster than it is today.
This seems to be inconsistent with what he and all other top developers of Ethereum 2.0 have said over the years: Ethereum 2.0 has been moaning with the weight of years of success. A year that will be orders of magnitude more scalable than the current blockchain.
reference: PYMNTS Blockchain Series: What is Ethereum?Blockchain that moved cryptocurrency beyond currency
So which is it? Is the highly advertised Ethereum 2.0 stuck at the same speed?
Technically it is. actually? No, not at all.
In the payments industry, speed tends to refer to the number of transactions per second (TPS). However, in blockchain, “scalability” is the term used to describe TPS. Velocity is something completely different: block time.
read more: Bitcoin’s 10-minute block time batch and variable transaction fees enhance RTP
When Buterin talked about “the limits of faster block times” in a recent Reddit discussion thread — he Repost On Twitter — he mentioned the speed at which new blocks of transactions are added to the Ethereum blockchain. And it’s more about security than scalability.
Ethereum’s block time is currently about 13 seconds. This is much better than Bitcoin’s 10 minutes, but since Solana, one of the current “Etherium Killer” blockchains trying to rob developers and projects, has a block time of 400ms, 0.4 A new block is added every second. It can also handle 50,000 TPS.
read more: PYMNTS Blockchain Series: What is Solana?
However, due to an ongoing project to convert Ethereum to Ethereum 2.0, built on a much more environmentally friendly and much more scalable Proof of Stake consensus mechanism (as opposed to Bitcoin-style Proof of Work mining). It can reach 100,000 TPS.
read more: PYMNTS Crypto Basics Series: What is the consensus mechanism? Why does it destroy the planet?
Currently, block speed is very important for payments, but it affects transaction time (latency) and final confirmation of the transaction, all about security. Once the information is recorded, blockchain transactions are vulnerable for a short period of time after being added to the block for all of the bragging exemptions for information changes. Please see the link below for details.
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Blockchain trilemma
“Trilemma” is a term coined by Buterin that describes the problems of the three core functions of the public blockchain. It’s decentralized, secure, and scalable.
Part of the dilemma of the word trilemma refers to the widely accepted theory that one of these three must always be sacrificed in order to reinforce the other two. Therefore, blockchain design is a balanced behaviour.
A way to enhance decentralization is to add a node with a complete record of all transactions on the blockchain. But that means more people competing to win the right to validate transactions and add them to the blockchain in exchange for newly coined coins and transaction fee rewards.
A way to make the blockchain more secure is to spend more time and effort validating transactions. They all have to agree that the newly written block is accurate — reach consensus. Nodes that do not agree will be forked into separate blockchains. And that takes time.
Adding scalability means adding transactions to the blockchain by reducing the block time or increasing the size of each block.
The trilemma is: The more nodes you have, the more decentralized and safer your blockchain will be, but it will take longer for all nodes to reach consensus, which will hinder scalability.
Similarly, increasing scalability and decentralization means reducing security because validation needs to be done more quickly, which reduces security.
To be safer and more scalable, we need to reduce the number of nodes and make the blockchain more centralized. This is because consensus can be reached quickly with a smaller number of people without shortening the verification process.
Proof of work blockchains like Bitcoin and today’s Ethereum sacrifice scalability, while proof of stake blockchains are less secure, but can be more scalable.
Buterin’s point is that Ethereum 2.0 will give up too much security by adding new blocks faster than Ethereum does today.
How to extend Ethereum 2.0
Ethereum 2.0’s Proof of Stake consensus mechanism seeks to provide a very high level of confirmation to the block. [meaning consensus of validity] This requires thousands of signatures. … This process has some latency and is time consuming. “
The way Ethereum 2.0 avoids the trilemma is sharding. That is, create a new sidechain that runs parallel to the main blockchain and split the load. This allows you to handle more transactions without reducing the number of nodes or rushing the validation security process.
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