Ethereum has been seeing a bullish trend in its adoption and applications ever since it was invented. Though the ETH coin isn’t the most valued of cryptocurrencies, Ethereum revolutionized the applications of blockchain technology by being the first open-source blockchain platform where developers could develop their decentralized applications (DApps) and introducing smart contracts.
However, despite its huge popularity, Ethereum’s full potential has been held down by being less scalable because it was developed to use the Proof-of-Work consensus mechanism just like its predecessor, Bitcoin. Though Ethereum’s program was slightly improved to make transactions faster compared to those of Bitcoin, Ethereum still lags behind some newer blockchain technologies like DASH, Ripple and the like, which use Proof-of-Stake consensus mechanism. Initially, Ethereum could only handle 15 transactions in 16 seconds.
Change of the consensus mechanism
Ethereum users are egaelry waiting for the mich anticipated ETH 2.0 update that is expected in the last quarter of 2020. However, things seem to be moving faster than expected after Ethereum’s founder tweeted about the success of the initial deployment of Ethereum’s layer 2 scaling strategy.
While everyone wasn’t looking, the initial deployment of ethereum’s layer 2 scaling strategy has *basically* succeeded. What’s left is refinement and deployment. A thread: https://t.co/30Dfr9XmFs
— vitalik.eth (@VitalikButerin) June 1, 2020
With the success of the initial deployment, what is remaining is only the refinement and complete deployment of the layer 2 scaling strategy.
What layer 2 scaling strategy means
After identifying that Ethereum blockchain has scalability issues, Vitalik Buterin identified strategies of improving the blockchain’s scalability. Those strategies included “sharding”, also referred to as the “layer 2 strategy” or HackMD or ETH2 shard chain simplification.
Initially, the Ethereum blockchain network was designed for every transaction to be processed by all the nodes before being declared successful. This ended up taking a huge amount of the networks activity that would be used for other things.
To free up the system, sharding will make it possible for transactions to go through without the need of being verified by all the nodes. Transactions involving token transfers will be done on the layer 2 protocol to free the rest of the system.
In the new strategy, the amount of shards is brought down to 64 from 1024 while the number of shards required per slot is increased to 64 from 16. Then for every beacon chain block, there shall be a published crosslink to allow for optimal workflow. Additionally, the EEs shall be simplified, smaller shard chain logic shall be needed and it will not be mandatory to pay transaction fees via decentralized exchanges.
What the scalability overhaul means for users
Once the overhaul is complete, Ethereum users will enjoy transaction speeds of thousands of transactions per second. This will only make Ethereum better especially for DApp developers.
It will also be good news for Ethereum’s use cases which span across a wide range of fields ranging from supply chains, health, Initial Coin Offerings (ICOs), Initial Exchange Offering (IEOs), transportation, Structural health monitoring and finance among many more.