Maximizing the Benefits of Blockchain Technology with P2P and Plasma Cash
The advent of peer 2 peer in crypto currency transactions has improved the options available to both buyers and sellers. Apart from allowing the two parties to set terms of trade, it speeds up transactions and also prevents third party arbitrage that centralized exchanges are known for. Traders can set their own price while buyers can look out for the most favourable sell order that suits them. This is unlike our regular crypto currency exchanges that collect cryptocurrency or fiat money and exchange it for BTC at a rate they want. Some even require that the seller and buyer provide identification before transaction can be executed. P2P eliminates such hurdles. With the introduction of plasma and plasma cash by the OmiseGo team along with Vitalik Buterin, the co-founder of Ethereum, the future is looking bright for crypto currency. A scaling infrastructure devised to improve the efficiency and volume of data handling in Ethereum, plasma is set to solve many problems that the network has been battling.
Plasma: Ambitious Scaling, Speed and Security Vision
The future and feasibility of crypto currency in real-world utilization depend so much on its scalability. People want speed matched with anonymity in crypto transactions. Recently, the delay in confirmation of bitcoin transactions forced many influential coin holder and miners to debate and find a solution. The result was SEGWIT which made Bitcoin transactions faster. Though it is built around a similar technology like BTC, Ethereum’s real value is its use as an application platform. To guarantee its continuous relevance, the Ethereum team realized they need to improve scalability like BTC did with SEGWIT. However, instead of using incremental changes on the network which increases the amount data that need to be processed, the team innovated Plasma. Plasma is an additional on-chain platform that will ensure the handling of smart contracts like the main network without broadcasting unnecessary transactions to the public chain of Ethereum. With these, only completed transactions will be published on the public chain of Ethereum. The plasma is a system of child blockchains created using series of smart contracts and subordinate to the main blockchain. To reduce backlog of data, the sub-chains don’t share transaction data with main network except hash of pre-collected transactions minimized on bitmap in a single bit. This however has its downsides, it only enables scaling on a quadratic level. It cannot allow the growth on an exponential level that crypto lovers always dream of on the internet. The need to download all the blocks of plasma was another drawback as it constitutes a drain on time and resources.
Enters Plasma cash:
The drawbacks of plasma in terms of quadratic scaling made Buterin to innovate new means of addressing the real problems they want to avoid. Plasma cash will enable exponential scaling with the creation of a new coin with its own unique ID for each deposit. The uniqueness of the solution is that each coin will represent only the deposited amount. The coin will is also non-fungible. With the identification of the coin by its particular location in the chain, all activities relating to the coin will only be found in corresponding places of the coin. With the narrowing of data to be processed, plasma cash offers client the advantage of downloading only the data of the particular location of their coin instead of downloading entire plasma blocks. The amount of data processed by the client goes down very considerably. This saves time and make it less complicated.
According to Buterin, each and every single coin is identified with the particular user. Only the user will bear the risk of theft compared with other blockchain where everybody bears the loss.
No confirmation needed:
Because each coin is allocated to a specific user, this system requires no additional communication rounds. With less data to be processed, there is an enormous amount of memory and processing power that will be saved by the participants of the chain. This makes interaction with other participants of the system less expensive. Decentralized apps will be able to run with lightening transactions since there is less backlog to worry about.
The advantages of P2P and Plasma cash stated above is the reason why we are as a leading innovator in the blockchain industry is modelling our upcoming exchange around peer to peer and plasma cash. We value your convenience and freedom.
Cr. Elizabeth Olarewaju (Editor @ Liquid8)