Ethereum Will Eventually Achieve 1 Million Transactions Per Second
Vitalik Buterin made some pretty awesome promises recently:
With second-layer solutions such as Sharding and Plasma, the Ethereum network will eventually be able to process 1 million transactions per second and potentially more than 100 million transactions per second.
Vitalik Buterin, the creator of Ethereum, speaking in a recent OmiseGO AMA session, is giving his assurances in how he sees the dApp platforms will solve their scalability issues.
In the past, whether at conferences or in presentations, Buterin emphasized that the Ethereum blockchain protocol and decentralized blockchain networks, in general, are struggling to deal with scalability issues. That’s so 2017, now in 2018 with MainNet launches of EOS and Tron in process, and Ethereum making significant progress with sharding, it seems the creator of Ethereum, is seeing light at the end of the tunnel.
Can Sharding and Plasma Give Ethereum Warp Speed Transactions Per Second?
In September 2017, during an interview with venture capital investor Naval Ravikant at the Disrupt SF 2017 conference hosted by TechCrunch, Buterin noted that bitcoin and Ethereum have been processing three to six transactions per second at peak capacity.
While I’ve written about sharding before, Plasma, a system of smart contracts that seeks to increase the computational potential of the world’s second-largest blockchain can help overcome the bottleneck.
According to Coinbase, Plasma was created by Buterin and Bitcoin Lightning Network co-creator Joseph Poon last year, the scaling solution is one of many under development that aims to boost the capacity of ethereum, specifically working by creating a layer of smart contracts that can interact with the main blockchain.
When Ethereum Will Overtake Visa in Transaction Frequency?
We know that for the blockchain to support large-scale payment networks such as Visa, stock markets like Nasdaq, and Internet of Things (IoT) networks, it will have to process hundreds of thousands of transactions per second.
There is a specific point of his interview at TechCrunch Disrupt, that addresses this from the perspective of Ethereum vs. Visa.
If you jump to 10 minutes and 45 seconds of this video, you will hear the relative comparisons and why Ethereum’s work on Sharding and Plasma are so key. I do not think I’ve ever watched a blockchain related YouTube clip as much as the above one, since I’m fairly curious about the future of decentralized networks.
Transaction Frequency Per Second
Ethereum has been doing five per second and if it goes above six, then it is also at peak capacity. On the other hand, Uber on average does 12 rides per second, PayPal several hundred, Visa several thousand, major stock exchanges tens of thousands, and in IoT, you’re talking hundreds of thousands per second.
- Ethereum 2017: 5 per second
- Uber: 12 rides per second
- Paypal: 100s per second
- Visa: 1000s per second
- Stock Exchanges: 10,000s per second
- IoT: 100,000s per second
Now if you are curious about Plasma, you can read this introduction. The fact that Vitalik Buterin, maybe the most recognizable face in cryptocurrencies is saying this now means Sharding and Plasma really could be the answer, or at least Ethereum is making strides on the problem. It may need significant progress to compete with newer dApp platforms that could have an edge in this regard such as EOS, Cardano, NEO and Tron. In the race for this speculative Blockchain 3.0 era, it’s super interesting to watch Ethereum, as Bitcoin’s price however volatile as a store of value, is more symbolic than representative of the innovative tech and value system that Ethereum on the other hand represents.
It’s no mistake that Vitalik Buterin often mentions “decentralization”, it’s at the heart of how GenZ and young Millennials want the future to be.