- Recent StarkEx measurements reveal that Ethereum’s scalability can be increased by 2000x.
- The improved scalability will allow Ethereum to compete with Visa, Mastercard and Paypal.
The StarWare project determined that the Ethereum blockchain has the capacity to improve its scalability in 2000x. The startup concluded that the improvement occurred because of the implementation of the hard fork Istanbul. This will allow the Ethereum network to process 9,000 transactions per second (tps) with a 75 gas/trade in contrast to the 2,000 tps with 300 gas/trade registered by the blockchain in its pre-Istanbul stage.
Hard fork Istanbul is the eighth update for Ethereum. The first part of this update was implemented on December 8, 2019. The fork marks the beginning of the transition of the Ethereum network to a scalable Proof of Stake (PoS) network. Another Hard Fork will occur in the first quarter of this year.
Ethereum could outperform Visa, Mastercard and Paypal in terms of TPS
The increased scalability of the Ethereum network is related to the implementation of Sharding and Plasma. These enhancements will multiply the scalability of the network when Ethereum completes its transition to Proof of Stake.
Ethereum co-founder Vitalik Buterin explained in an AMA session with OmiseGO what Sharding and Plasma do in the Etherem network. Sharding is a first layer scalability solution that uses microchains to validate different transactions on the Ethereum blockchain. Thus, it is not necessary for all nodes in the blockchain to verify the transactions, but a group of nodes can do it independently.
On the other hand, Buterin said that plasma is a second layer solution that works similarly to Bitcoin’s Lighting Network. Plasma allows branches to be used off-chain to process smart contracts with higher volume. Buterin clarified that the two solutions work complementarily.
Sharding in combination with Plasma will be able to increase the scalability of the network by, according to Buterin, one million transactions per second. In comparison Visa and Mastercard, two of the largest credit card companies, can handle about 2000 tps and PayPal handles 200 TPS. StarWare’s measures put Ethereum well ahead of these large payment processing companies.
StarWare specified the reason behind the measurements and increased scalability:
We are no longer limited by the cost of verifying proofs on-chain! The limiting factor is the strength of the prover we can deploy off-chain.
In addition, the startup announced that one of its products StarkEx will be introduced to the mainnet shortly. The product will be integrated with the platform of the DeversiFi cryptoexchange to take advantage of the scalability benefits described above.
StarkEx *measurements* (not approximations, nor estimates) break Ethereum’s scalability record post-Istanbul, with a 2000X improvement over Ethereum Layer-1:
9K trades/sec at 75 gas/trade (or 18K payments/sec) (1/5) pic.twitter.com/1Y325Db13S
— StarkWare (@StarkWareLtd) January 6, 2020
Problems with the implementation of the hard fork Istanbul
Although the implementation of the Istanbul update was successfully completed, the subsequent process has encountered obstacles. After its activation, the Ethereum Difficulty Bomb was activated earlier than expected and it was necessary to implement a new Hard Fork called Muir Glacier.
The update activated on January 2, 2020 at 8:29 AM (UTC) had the sole purpose of moving the Ethereum Difficulty Bomb by 4 million blocks, about 1.7 years. The Difficulty Bomb is a deterrent mechanism to force miners to make the transition from Proof of Work (PoW) to Proof of Stake (PoS).
The price of the Ethereum is $ 141 USD, at the time of publication, and has moved sideways (-0.21%) in the last 24 hours. However, on the weekly chart it has made a gain of 7.28%.