Justin Drake and Vitalik Buterin, Ethereum Foundation Video. July, 2018.

Ethereum 2.0 on the Quest for Scalability

Scaling: Ethereum’s make or break challenge.

Ethereum has a plan to scale say Justin Drake, Vitalik Buterin and Karl Floersch in a conversation with TechCrunch.

  • “Scaling” as a hard Problem, Skip to 2:13.
  • Skip to 3:00 to hear about Casper and Sharding being combined (Justin Drake).
  • Karl on Plasma and Raiden, skip to 5:55.
  • Vitalik on Governance, skip to 10:20

With the announcement (December, 2017) of Casper that will be a transition into a hybrid of Proof-Of-Work/Proof-Of-Stake with a product timeline of maybe 3–5 years; the pressure to introduce sharding means we may see Ethereum manifest its 2.0 version of upgrades a lot sooner.

As of July, 2018 the decision to combine Casper and sharing into a single upgrade means the product timeline could be accelerated. While sharding enables quadratic scalability it also means the shards share consensus. If shards are like parallel universes, there are network effects when adding Casper. For crosslinks to achieve finality Casper brings value; thereby connecting the shards better. Ethereum is now calling the overall endeavor of implementing Casper & Sharding together, Ethereum 2.0.

While their design is as simple and elegant as possible, the roll-out will likely occur over several years. Casper is likely to come first said Justin Drake, possibly in 2019. Sharing will have two major phases, the first being the data layer, coming to consensus as to what data is in the shards. Phase two is about the state, giving meaning to that data and a notion of transaction. So according to the Summer of 2018, the roll-out for Ethereum 2.0 may look like the following:

2019: Casper

2020: Phase One of Sharding: Data Layer

2021: Phase two of Sharing: State

While Casper and sharing give more scalability and security to the mainchain there’s also other stuff going on. As for the work being done on Plasma and Raiden. Plasma is all about scaling up dApps as they exist on Ethereum today. That is, Plasma enables you to commit to a large number of transactions without sending them on to the mainchain but instead just provide the crypto-economic commitment. Raiden and state-channels are these unanimous consent agreements enabling multiple parties to update state without putting it on the mainchain. These enable therefore transaction inclusion, and sense of scalability until sharding is more mature.

Once the mainchain is more scalable, Plasma could work even easier and result in cheaper block submissions. Ethereum can therefore achieve scalability through the synergy and network effect of these various technologies working in tandem and being roll-outed gradually, essentially over the next three years.

Merkle Trees and Crypto Kitties aside, scalability does not appear to be coming soon. As demand for using public blockchains is increasing, the pressure to scale is also increasing with a slew of potential competitors in Cardano, DFINITY, Qtum, EOS, NEO and so many other smart contract platforms.

While Casper and Sharding are updates, while Plasma and State channels are layer 2 technologies, not forks. Plasma is therefore not a ‘magic unicorn’ technology. Ethereum has to continue to evolve its governance and consensus as to future product timelines and learn from the gridlock that is often associated with the various Bitcoin ‘heads’. Governance is in this sense one of the hardest human problems in developing blockchains that are supposed to be decentralized.

Proof of Stake and Sharding appear to be part of the social contract of the Ethereum community, pretty major updates on Ethereum’s roadmap in the next few years. Developers associated with Ethereum pretty much understand the dedicated progress of the entire Ethereum vision. The commitment of the community must be not to stagnage and having a clear product roadmap ends up being a pretty significant portion of that. App developers will be in the near future choosing more base chain transactions or more Plasma chain transactions. Ethereum Gas prices could therefore go down pretty significantly around the 2020 mark.

Now with ETH Research it’s easier to learn about Ethereum’s fundamentals than ever, everything they do is transparently put out for the community to see, so a lot of interested parties and not just developers are getting involved. There’s also way more videos on Crypto Economics in general, and for example the Beacon Casper Chain one.

Interestingly Ethereum did mention they keep in touch with non-affiliated academic research groups in the space even talking with DFINITY “a couple of times.”Clearly they are following some of the pioneering work of other third generation blockchains as well.

For Ethereum 3.0, that might mean a system that’s fully quantum-secure. Quantum computing experts say that quantum computing could be up and running as early as 2023. Erasure codes to make data availability proofs might also be useful as well as likely super quadratic sharding. With Ethereum 2.0 in the pipeline for likely at least the next three years, Ethereum 3.0 remains more research topics for 2018–19.

Ethereum foundation videos are right here, in case you are curious about a future of STARKS, Casper, and how much Casper loves Sharding and everything.