16 ms·

How can Ethereum systematically scale better?

199 points by transitorykris 9y ago

buttershakes 9y ago
It's very far from being able to scale to where it needs to. I think it remains to be seen if the system can be transitioned to a highly scalable one, it seems to me that we need to think from the ground up how to achieve the scale necessary. It's just a really really hard problem, it's not an afterthought, or a secondary goal.
- drcode 9y ago
  well... Vitalik so far seems pretty confident a sharding system is feasible, and I would be loath to bet against Vitalik. Certainly he scares me a bit at this point because he's already basically stated that he believes it's impossible to implement blockchain sharding without erasure coding, so it certainly doesn't look like sharding is going to be a simple undertaking. https://en.wikipedia.org/wiki/Erasure_code https://en.wikipedia.org/wiki/Erasure_code
  - woah 9y ago
    Vitalik's been talking about a sharding system around the corner for years now. The team working on it seems to be more interested in the theory than the practice of sharding. Additionally, any sharding design will probably have to break some existing assumptions and contracts, making it a really hard fork. I wouldn't be surprised if something else comes along offering a somewhat ethereum-compatible system with sharding for those who are working on real applications and need it.
    - oillio 9y ago
      Agreed. Both PoS and Sharding are difficult problems that are still very experimental. The fact that they need to support backwards compatibility just compounds the difficulty. Then add the difficulty of deploying these new concepts on a system worth tens of billions of dollars... I do not envy them.
    - deleted 9y ago
      [deleted]
    - chejazi 9y ago
      > something else comes along offering a somewhat ethereum-compatible system Dfinity comes to mind (Solidity contracts run on Dfinity) https://dfinity.network https://dfinity.network
    - naasking 9y ago
      > The team working on it seems to be more interested in the theory than the practice of sharding As it should be for something that will need to be unbreakable and ultra-reliable. I detect a tone of distaste for theory in your phrasing, which isn't promising.
benchaney 9y ago
A user only needs to create a transaction if they upload something. The 175k Facebook requests per second that they compare to is mostly just people looking at stuff, which wouldn't require a transaction.
- needz 9y ago
  What about logging?
  - benchaney 9y ago
    Decentralized apps are structured very differently than centralized apps. It doesn't really make sense to talk about about logging in that way for a decentralized app.
- deegles 9y ago
  Nope, that's a low end estimate of writes. "Every 60 seconds on Facebook: 510,000 comments are posted, 293,000 statuses are updated, and 136,000 photos are uploaded." https://zephoria.com/top-15-valuable-facebook-statistics/amp/ https://zephoria.com/top-15-valuable-facebook-statistics/amp...
  - benchaney 9y ago
    (510000 + 293000 + 136000) / 60 is about 15.5k, so slightly less than the estimate in this article, although you are right that I was overstating the amount of traffic that is read only.
    - deegles 9y ago
      Yes, but that's not counting things like post likes, FB Messenger, check-ins, account creations, profile edits, logging and statistics, etc etc. I wouldn't be surprised if they're in the millions of writes per second.
      - deleted 9y ago
        [deleted]
Cshelton 9y ago
You forgot to mention another scaling effort/idea, one which I think is the most important, not only to Ethereum but any blockchain: Blockchain Interoperability. It can even be the same protocol (Ethereum) or across different protocols (Bitcoin). Much of the enterprise world right now is throwing A LOT of development efforts at blockchain ideas, however they are all separated, private chains, they aren't just working on the Ethereum public chain (Homestead). However the development efforts of those companies will benefit the public chains, which is crucial. But I think at this point the idea of having a single public chain to rule over everyone is gone. The future will have millions of blockchains.. an internet of blockchains with some underlying protocols to transact across chains. This is where you will get your scale. Take the FaceBook example. What if the users of FaceBook, i.e. the FB clients, implemented a blockchain to support all functionality through FB (payments, sharing, likes, messages, etc.)? It would basically be away for users to control their own data, separate from the applications that use them (Own your data). But for brevity, this chain would just be the FB chain, which could interop with any number of chains if needed, but this chain would be scaled by the clients that use it. You could even have social verifiers to implement a POS (proof-of-stake) in this FB chain which could stake an asset of some sort on assuring things shared on the network are real (fake news). But that's off point. The whole idea of this new internet of blockchains is mostly about users having complete control/self-sovereignty over their data/individual. Many users won't even know that underlying the apps they use, their data and how they interact with other users is powered by the blockchain. Smart contracts, and all these thousands of tokens, in essence, given an underlying protocol that doesn't exist yet, will be the universal API that can connect everything in a trustless way.
- whiskers08xmt 9y ago
  How would inter-operability differ from sharding? Is the difference that sharding only works with a specific blockchain technology, and inter-operability could connect multiple, technologically different, blockchains?
  - Cshelton 9y ago
    Yes, each chain on its own can use sharding. The protocol underlying each chain/sharding method would have to implement the interoperability of chains protocol. Think of it like TCP/IP today. In your own network, you can use whatever you want, let's say Zigbee. Once I want to interop with other networks though, I'll have to go to TCP/IP or similar.
discodave 9y ago
Just to answer the question in the HN title "Replace it with a provably correct distributed consensus algorithm like Paxos."
- lotsoflumens 9y ago
  I believe that HashGraph might be a better idea ... https://en.wikipedia.org/wiki/Hashgraph https://en.wikipedia.org/wiki/Hashgraph
- zeroxfe 9y ago
  Paxos requires trust between peers. The Blockchain is designed to tolerate byzantine failures. These are very different problem spaces. (/me worked on Paxos for about a decade.)
pgodzin 9y ago
> And since these systems are open rather than proprietary, we’ll see applications bigger than Facebook. I think this vastly overestimates how much the vast majority of people care about this
- free2rhyme214 9y ago
  I think you're underestimating how big the cryptocurrency market will be.
  - pgodzin 9y ago
    In terms of market size sure, in terms of active users, I'm skeptical. Best case is that the decentralization is seamless and creates no friction. There are already closed protocols that enable almost everything you would be able to do with that. Anything else would require using the cryptocurrency as a store of value, which you will NEVER get 2 billion people to buy into.
- pdog 9y ago
  Open protocols are already much larger than closed systems. Look at email (based on SMTP) and the internet (based on TCP/IP). This statement only expects a successful new protocol to follow the same trend.
  - monocasa 9y ago
    I mean, Diaspora has an open protocol. How well did that take off?
    - nannal 9y ago
      What's a Diaspora?
  - r00fus 9y ago
    Selection/survivor bias. For each SMTP there are probably 100 open protocols that are by the roadside.
sputknick 9y ago
Why doesn't he mention Raiden? Won't that solve most of this? Also I've heard rumors that Raiden is close to being ready? It's supposed to provide multiple orders of magnitude increase in transactions per second. http://raiden.network/ http://raiden.network/
- Jabanga 9y ago
  Raiden is an implementation of the payment/state channel network he refers to.
Animats 9y ago
Not having scalability keeps the hype going. If current cryptocoin technology could support VISA-scale volumes, it would be obvious that the need for high transaction capacity wasn't there. With transaction volumes limited to a few transactions per second worldwide, it's possible to claim that there's pent-up demand waiting to be unleashed, justifying excessive valuation.
- Jabanga 9y ago
  There's demonstratably pent up demand. For one, Bitcoin had transaction volume doubling every year until it hit the block size limit [1]. Since then, transaction fees have skyrocketed, as a result of growing competition for limited transaction space [2]. Ethereum has similarly had rapid growth in transaction volume [3], which will need scaling solutions to continue once the protocol's inherent limits are reached. [1] http://www.coindesk.com/data/bitcoin-daily-transactions/ http://www.coindesk.com/data/bitcoin-daily-transactions/ [2] https://bitinfocharts.com/comparison/bitcoin-median_transaction_fee.html https://bitinfocharts.com/comparison/bitcoin-median_transact... [3] https://etherscan.io/chart/tx https://etherscan.io/chart/tx
- theWatcher37 9y ago
  Maybe preface your comment with "I have never used or followed Bitcoin outside of news articles".
  - prawn 9y ago
    I'm genuinely curious - can you explain why Animats is off-track?
    - campbelltown 9y ago
      Whether or not you agree with the model of token sales (most here don't) Ethereum already hit it's scaling limits after hosting several hyped ICOs. When the ICO bubble deflates or crashes, I suspect the ICO model is not going away, but will look different. I can envision a world where tons of small startups are chasing capital through small, niche-specific ICO funding rounds. For this to be possible, Ethereum in it's present state needs to handle many more transactions. For example, during the Status.im sale, the network was unusable for 2 full days. Similarly, many app developers have noted that gas fees are too high to validate using the blockchain for their applications. Just making a profile on ethlance.com is unnecessarily expense due to the gas cost. This results in unrealized demand. When Ethereum scales to 8x transactions I have no doubt the scaling debate will continue, as demand will have increased as well.
mempko 9y ago
The blockchain to me is fundamentally flawed way to look at distributed computation. It really isn't distributed computing because there is a shared agreed and singular "truth". Truly distributed systems must deal with inconsistency instead of trying to keep a consistent transactional view of the world. I'm not sure I want it to scale. The innovation of the blockchain is that it allows people to lend their computers to what looks like a singular system. However, as oulined by this document, the cost is huge in both time and burning the CPU oil. I also don't believe in the transactional spot trade view of the world. It is a narrow way of viewing cooperation and markets. Unbreakable contracts are frightening. Everyone who deals with contracts between peers knows that contracts could be broken and are always negotiable. Unbreakable contracts just seems like a viscous tool for people who have move power over those with less. Because among equals, contracts are meant to be broken, changed, re-negotiated.
- zik 9y ago
  > It really isn't distributed computing because there is a shared agreed and singular "truth". The last three of the seven scaling options are fully distributed and don't have a single shared truth. > However, as oulined by this document, the cost is huge in both time and burning the CPU oil. This document covers "proof of stake" which does away with the CPU intensive proof of work you're referring to. > Everyone who deals with contracts between peers knows that contracts could be broken and are always negotiable. Ethereum contracts have contract break clauses in them just like legal contracts.
- zeroxfe 9y ago
  > The blockchain to me is fundamentally flawed way to look at distributed computation. It really isn't distributed computing because there is a shared agreed and singular "truth". This is an odd definition of distributed computing. Blockchains fall squarely under the realm of "distributed consensus protocols", which are quite fundamental to distributed computing.
frozenport 9y ago
>>Conclusion >>Everything will be tokenized and connected by a blockchain one day. WHAT? The guy just explained how the system is thousands of times off from where it should be!
deweller 9y ago
It is important to note that not all of the on-chain solutions are cumulative. Say that increasing the gas limit and swapping virtual machines does get you an 8x improvement each. After both are implemented, you don't don't have a 64x improvement, you have an 8x improvement. All that raising the gas limit does is increase the maximum number of transactions per block. It doesn't matter how fast you can process those transactions if the gas limit is too low to fit all of those transactions into a block. Ethereum is useful and novel and I am a fan. But we are a long, long way from being able to run something like Facebook on it. The "optimistic launch" dates are extremely optimistic.
- acover 9y ago
  What is needed to get to Facebook level? Is there designs that sacrifice trust in results for performance?
  - asdfaoeu 9y ago
    > Is there designs that sacrifice trust in results for performance? Sure is have a look at https://www.mastercard.com/ https://www.mastercard.com/
    - acover 9y ago
      That isn't decentralized
      - polyomino 9y ago
        Neither is ethereum
      - deleted 9y ago
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      - deleted 9y ago
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  - gfody 9y ago
fiatjaf 9y ago
The whole blockchain festival doesn't make sense to me. Every blockchain must have a coin attached to it, otherwise there's no incentive to people to watch the blockchain and invest resources in securing it. Bitcoin was about money, not "distributed consensus", that was just a way to achieve money. Now when people talk about blockchains as being the solution to the distributed consensus problem they forget about the money part of it. The most bizarre phenomenon I've seen was Tezos, a coin whose value proposition was that of solving governance through the same blockchain it would use to manage its coins. The creator of Tezos was talking about governance as a consensus problem that could be solved in the same way money was solved by Bitcoin ("everybody must agree, right?") without realizing there were two different concepts of "consensus" being used.
- daxfohl 9y ago
  Maybe ads. Perhaps a distributed ledger about who has see what ads. That's worth money, and I'm sure marketers would love traceability. So if ad-coin takes over that would be like injecting advertising code into the "CPU registers" of the internet. I can't wait.
  - Frogolocalypse 9y ago
    My god. Get that suggestion scrubbed from the interwebs. Imagine a coin that controlled all of the commerce of the world and whose sole allocation of wealth came for the production of advertisements. Ads for ads. No product. Just ads all the way down.
- vertex-four 9y ago
  Unfortunately, most people don't understand what a blockchain is, including many people working on altcoins. This causes them to make buzzwordy statements which are, to everyone else, nonsensical. "Code is law" being one of them. "Property on the blockchain" being another.
  - simias 9y ago
    The lack of technical knowledge in the cryptocurrency community is staggering. It's obvious that a huge number of people are attracted by the "get rich quick" aspect of it all and they lack the basics to really understand the trade-offs and the subtleties of the various blockchain "flavors" and tweaks. So it turns into dumb cargo culting like "Proof of Stake is 100% proven not to work", "Proof of Stake is 100% proven to work", "Lightning Network is going to fix everything and bring world peace", "Lightning Network is going to ruin everything and bring WW3" etc... And you can't have any constructive discussion because if you try to argue for or against a certain technical proposal you'll immediately be called a "paid shill" or a "troll" regardless of your arguments. I've been lurking in the bitcoin subreddits lately and it's really one of the least helpful and constructive communities around. And it's a bit sad because on the technical side the blockchain is pretty damn interesting.
louprado 9y ago
Does anyone have an opinion if new tokens (aka altcoins) created by ERC20[1] are exacerbating Ethereum's network congestion ? My initial reaction is that ERC20 is a parasite vector that will cause long term harm to the value of ETH. Altcoins, to some extent, all compete for speculative dollars. For all I know 80%[2] of the top 800 coins on coinmarketcap.com are ERC20 issued tokens. That means a lower price for ETH due to competition and therefore a lower incentive for the miners who can instantly start mining another currency. Which leads to further latency, less liquidity, and further price depression. [1] ERC20 is a protocol for issuing new tokens on the Ethereum blockchain. [2] Does anyone have a source ? This was a wild guess.
- gst 9y ago
  > long term harm to the value of ETH I don't see why this is a problem. The goal of the Ethereum developers is to increase the utility of the network, not to artificially inflate the value of ETH. In fact for one of the future Ethereum upgrades it's planned to convert ETH into a ERC20 token, so that it's at the same level as all the other tokens on the network. It wouldn't even get a special status in terms of transaction fees, as (IIRC) the plan is to allow miners to accept whatever tokens they prefer for the gas payment. See https://github.com/ethereum/EIPs/issues/28 https://github.com/ethereum/EIPs/issues/28 and https://www.reddit.com/r/ethereum/comments/572v7t/eth_as_an_erc20_token/d8ohxxb/ https://www.reddit.com/r/ethereum/comments/572v7t/eth_as_an_...
  - Jabanga 9y ago
    Neither of those links imply ether will lose its role as input for gas payment. It simply lets ether be used by contracts in the same way tokens are, which allows for greater abstraction of ether transactions. Vlad Zamfir explicitly rejects any call for economic abstraction: https://medium.com/@Vlad_Zamfir/against-economic-abstraction-e27f4cbba5a7 https://medium.com/@Vlad_Zamfir/against-economic-abstraction...
- deleted 9y ago
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- Jabanga 9y ago
kbody 9y ago
I have hard time believing that a knowledgeable person would have numbers on the scaling improvement column on the scaling efforts list. "3-10x" for ditching EVM for WASM which is at a concept phase, "2-8x" for parallel processing of transactions Even Vlad would laugh at that column. The whole thing feels like a desperate "don't panic sell" when people realize the state of Ethereum's scaling since today its blockchain is increasing at a rate of 1GB/day. I personally hope Ethereum's fans start to be more honest with themselves and do some critical thinking. There are some horrible echo-chambers (/r/ethereum /r/ethtrader) that are traps for newcomers. The closer scaling solution is Raiden (funnily one of the core devs is the one made the infamous hacked DAO contract) which is quite the challenge unless they intend to support a limited subset of Ethereum's capabilities, but they are working on it and looks alive. Apart from that which is a year or so away, Sharding is way off like the list says and will be a huge challenge.
- jerguismi 9y ago
  Also what is certainly interesting is ethereums difficulty bomb, which should activate later this year. Certainly gives interesting image on ethereums development style, this was implemented to "force" the ethereum devs to implent PoS before it activates. However as far as I understand, the only thing that this forces ethereum devs to do is a hard fork that removes the difficulty bomb somewhere this year. http://www.coindesk.com/ethereums-difficulty-bomb-smoke-no-fire/ http://www.coindesk.com/ethereums-difficulty-bomb-smoke-no-f...
  - pietjepuk88 9y ago
    There is only one type of difficult bomb for Ethereum (the ice age), and that is already underway. As linked to in that article, block times would reach about 30 s mid-August (https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_about_the_projected_coin_supply_over/ https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_...). The difficulty bomb/ice age is _not_ to force the devs to implement PoS. The reason the ice age(s) exist is to make sure minority chains eventually die. Bitcoin does not have this problem as much, because the difficulty adjustment is much slower, which easily results in hour long (or more) block times for weeks/months for a minority chain. The difficulty adjustment on Ethereum is much faster, so minority chains that arise after a protocol upgrading hard/soft fork could hypothetically survive. To incentivize miners and users to switch to the new chain, there needs to be some other mechanism in place, which is the ice age. The ice age causes block times to keep rising exponentially on the old chain (if no action is taken), so miners will eventually lose their reward and users will not be able to make transactions anymore. They move to the new chain (which postponed the ice age), and eventually the cycle repeats itself. This cycle has happened a few times already. Usually the fork would have already happened by now, so the impending Metropolis fork is different in that it's a bit late and the initial effects of the (ever worsening) ice age are felt.
sudshekhar 9y ago
Couple of questions: - Assume paypal implements a smart contract system. Users have an option to keep their contracts public or encrypt them with their password/random secret key. Defining a contract is like specifying a template. Deploying the contract locks up the requisite sum from the concerned parties. The contract distributes this sum according to its logic, when triggered. Since we don't have mining/redundant copies of data, paypal can afford to charge lower transaction fees overall. The system is altogether more efficient and user privacy is ensured via encrypting the contract to ensure nobody except the owner sees them. Apart from decentralization, what else does ethereum offer over and above this combination? - Despite trying pretty hard, I have been unable to understand the valuations of cryptocurrencies. According to my understanding, bitcoin is a commodity rather than a currency. Like gold, its value resides in how much value people put on it (unlike currencies, which have to be accepted all across their native country). However, unlike gold, bitcoin has no intrinsic value i.e the amount of money somebody would give to just hold onto it for eternity. So the value of bitcoin should be estimated from [value of transactions that happen on the network / number of bitcoins in circulation]. However, most of the transactions happening on the blockchain (IMO) are transactions between cryptocurrencies (eth->bitcoin->eth..). The few that happen in the real world (buying goods/services) are hindered by the continuously changing market value of bitcoin/eth. In this catch-22 (speculation hinders transactions, which makes it tougher to do fair valuation, which encourages speculation), how do we reach a consensus on the value of bitcoin?
- isubkhankulov 9y ago
  bitcoin's primary value generator since 2011 when Silk Road 1 launched has been uncensored money, or a payment network outside of any single entities control. Afaik, it was not designed with the black market in mind. Since then, people have started buying it because of its scarcity.
- Jabanga 9y ago
  >Apart from decentralization, what else does ethereum offer over and above this combination? Reliability. PayPal can change its mind and remove the feature. An immutable blockchain won't.
arisAlexis 9y ago
I think people should look into NEO for some innovation
- jjcm 9y ago
  What scaling benefits does NEO have over ETH/BTC?
ex3ndr 9y ago
Main problem is completely non-user friendly of crypto currencies. Bitcoin is a very simple thing - you have a wallet, number of transactions in your wallet and button to send funds to someone else. Bitcoin was like this since day 1. Ethereum right now is not usable at all. How i suppose to explain it to my mother? In default client always distract me from counting money and sending money. First screen - smart contracts? Okey... how to use it? Even hello world is 20 screens of documentation and involves many weird things like copying "compiled code" or visually comparing hashes. And in couple of years there are no useful applications on ethereum - so why bother to learn things? If you are working in some organization that needs/wants to use blockchain - sure, open sources of ethereum, start your own nodes over kubernetes and try to implement something. But your work will never go to a any public ledger - there are no reason to do so.
philanthropist 9y ago
I have a question that I hope someone can answer for me. I've owned about a dozen or so digital currencies as far back as 2012. Ethereum is one I am still trying to understand. My question is this - How does the functionality of Ethereum (it's blockchain and all that comes with it), convert to the valuation of one ETH being worth $300, or $500, or $100, etc.? How will ETH (the digital currency) be used that will give it these valuations? I understand other currencies. Take Ripples XRP for example; the more banks that are transacting with XRP, the higher the demand is for XRP, which equates to a higher valuation of XRP. So how does Ethereum and ETH get their values? Can companies use Ethereums service without increasing the demand for ETH (digital currency)?
Philosopher 9y ago
So he mentions hard problems in game theory and computer science which have never been solved... with maybe a handful of people working on them... and he thinks it will get done some time before the end of next year?

It's very far from being able to scale to where it needs to. I think it remains to be seen if the system can be transitioned to a highly scalable one, it seems to me that we need to think from the ground up how to achieve the scale necessary. It's just a really really hard problem, it's not an afterthought, or a secondary goal.

drcode 9y ago
well... Vitalik so far seems pretty confident a sharding system is feasible, and I would be loath to bet against Vitalik. Certainly he scares me a bit at this point because he's already basically stated that he believes it's impossible to implement blockchain sharding without erasure coding, so it certainly doesn't look like sharding is going to be a simple undertaking. https://en.wikipedia.org/wiki/Erasure_code https://en.wikipedia.org/wiki/Erasure_code
- woah 9y ago
  Vitalik's been talking about a sharding system around the corner for years now. The team working on it seems to be more interested in the theory than the practice of sharding. Additionally, any sharding design will probably have to break some existing assumptions and contracts, making it a really hard fork. I wouldn't be surprised if something else comes along offering a somewhat ethereum-compatible system with sharding for those who are working on real applications and need it.
  - oillio 9y ago
    Agreed. Both PoS and Sharding are difficult problems that are still very experimental. The fact that they need to support backwards compatibility just compounds the difficulty. Then add the difficulty of deploying these new concepts on a system worth tens of billions of dollars... I do not envy them.
  - deleted 9y ago
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  - chejazi 9y ago
    > something else comes along offering a somewhat ethereum-compatible system Dfinity comes to mind (Solidity contracts run on Dfinity) https://dfinity.network https://dfinity.network
  - naasking 9y ago
    > The team working on it seems to be more interested in the theory than the practice of sharding As it should be for something that will need to be unbreakable and ultra-reliable. I detect a tone of distaste for theory in your phrasing, which isn't promising.

benchaney 9y ago

A user only needs to create a transaction if they upload something. The 175k Facebook requests per second that they compare to is mostly just people looking at stuff, which wouldn't require a transaction.

needz 9y ago
What about logging?
- benchaney 9y ago
  Decentralized apps are structured very differently than centralized apps. It doesn't really make sense to talk about about logging in that way for a decentralized app.
deegles 9y ago
Nope, that's a low end estimate of writes. "Every 60 seconds on Facebook: 510,000 comments are posted, 293,000 statuses are updated, and 136,000 photos are uploaded." https://zephoria.com/top-15-valuable-facebook-statistics/amp/ https://zephoria.com/top-15-valuable-facebook-statistics/amp...
- benchaney 9y ago
  (510000 + 293000 + 136000) / 60 is about 15.5k, so slightly less than the estimate in this article, although you are right that I was overstating the amount of traffic that is read only.
  - deegles 9y ago
    Yes, but that's not counting things like post likes, FB Messenger, check-ins, account creations, profile edits, logging and statistics, etc etc. I wouldn't be surprised if they're in the millions of writes per second.
    - deleted 9y ago
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Cshelton 9y ago

You forgot to mention another scaling effort/idea, one which I think is the most important, not only to Ethereum but any blockchain: Blockchain Interoperability. It can even be the same protocol (Ethereum) or across different protocols (Bitcoin). Much of the enterprise world right now is throwing A LOT of development efforts at blockchain ideas, however they are all separated, private chains, they aren't just working on the Ethereum public chain (Homestead). However the development efforts of those companies will benefit the public chains, which is crucial. But I think at this point the idea of having a single public chain to rule over everyone is gone. The future will have millions of blockchains.. an internet of blockchains with some underlying protocols to transact across chains. This is where you will get your scale. Take the FaceBook example. What if the users of FaceBook, i.e. the FB clients, implemented a blockchain to support all functionality through FB (payments, sharing, likes, messages, etc.)? It would basically be away for users to control their own data, separate from the applications that use them (Own your data). But for brevity, this chain would just be the FB chain, which could interop with any number of chains if needed, but this chain would be scaled by the clients that use it. You could even have social verifiers to implement a POS (proof-of-stake) in this FB chain which could stake an asset of some sort on assuring things shared on the network are real (fake news). But that's off point. The whole idea of this new internet of blockchains is mostly about users having complete control/self-sovereignty over their data/individual. Many users won't even know that underlying the apps they use, their data and how they interact with other users is powered by the blockchain. Smart contracts, and all these thousands of tokens, in essence, given an underlying protocol that doesn't exist yet, will be the universal API that can connect everything in a trustless way.

whiskers08xmt 9y ago
How would inter-operability differ from sharding? Is the difference that sharding only works with a specific blockchain technology, and inter-operability could connect multiple, technologically different, blockchains?
- Cshelton 9y ago
  Yes, each chain on its own can use sharding. The protocol underlying each chain/sharding method would have to implement the interoperability of chains protocol. Think of it like TCP/IP today. In your own network, you can use whatever you want, let's say Zigbee. Once I want to interop with other networks though, I'll have to go to TCP/IP or similar.

discodave 9y ago

Just to answer the question in the HN title "Replace it with a provably correct distributed consensus algorithm like Paxos."

lotsoflumens 9y ago
I believe that HashGraph might be a better idea ... https://en.wikipedia.org/wiki/Hashgraph https://en.wikipedia.org/wiki/Hashgraph
zeroxfe 9y ago
Paxos requires trust between peers. The Blockchain is designed to tolerate byzantine failures. These are very different problem spaces. (/me worked on Paxos for about a decade.)

pgodzin 9y ago

> And since these systems are open rather than proprietary, we’ll see applications bigger than Facebook. I think this vastly overestimates how much the vast majority of people care about this

free2rhyme214 9y ago
I think you're underestimating how big the cryptocurrency market will be.
- pgodzin 9y ago
  In terms of market size sure, in terms of active users, I'm skeptical. Best case is that the decentralization is seamless and creates no friction. There are already closed protocols that enable almost everything you would be able to do with that. Anything else would require using the cryptocurrency as a store of value, which you will NEVER get 2 billion people to buy into.
pdog 9y ago
Open protocols are already much larger than closed systems. Look at email (based on SMTP) and the internet (based on TCP/IP). This statement only expects a successful new protocol to follow the same trend.
- monocasa 9y ago
  I mean, Diaspora has an open protocol. How well did that take off?
  - nannal 9y ago
    What's a Diaspora?
- r00fus 9y ago
  Selection/survivor bias. For each SMTP there are probably 100 open protocols that are by the roadside.

sputknick 9y ago

Why doesn't he mention Raiden? Won't that solve most of this? Also I've heard rumors that Raiden is close to being ready? It's supposed to provide multiple orders of magnitude increase in transactions per second. http://raiden.network/ http://raiden.network/

Jabanga 9y ago
Raiden is an implementation of the payment/state channel network he refers to.

Animats 9y ago

Not having scalability keeps the hype going. If current cryptocoin technology could support VISA-scale volumes, it would be obvious that the need for high transaction capacity wasn't there. With transaction volumes limited to a few transactions per second worldwide, it's possible to claim that there's pent-up demand waiting to be unleashed, justifying excessive valuation.

Jabanga 9y ago
There's demonstratably pent up demand. For one, Bitcoin had transaction volume doubling every year until it hit the block size limit [1]. Since then, transaction fees have skyrocketed, as a result of growing competition for limited transaction space [2]. Ethereum has similarly had rapid growth in transaction volume [3], which will need scaling solutions to continue once the protocol's inherent limits are reached. [1] http://www.coindesk.com/data/bitcoin-daily-transactions/ http://www.coindesk.com/data/bitcoin-daily-transactions/ [2] https://bitinfocharts.com/comparison/bitcoin-median_transaction_fee.html https://bitinfocharts.com/comparison/bitcoin-median_transact... [3] https://etherscan.io/chart/tx https://etherscan.io/chart/tx
theWatcher37 9y ago
Maybe preface your comment with "I have never used or followed Bitcoin outside of news articles".
- prawn 9y ago
  I'm genuinely curious - can you explain why Animats is off-track?
  - campbelltown 9y ago
    Whether or not you agree with the model of token sales (most here don't) Ethereum already hit it's scaling limits after hosting several hyped ICOs. When the ICO bubble deflates or crashes, I suspect the ICO model is not going away, but will look different. I can envision a world where tons of small startups are chasing capital through small, niche-specific ICO funding rounds. For this to be possible, Ethereum in it's present state needs to handle many more transactions. For example, during the Status.im sale, the network was unusable for 2 full days. Similarly, many app developers have noted that gas fees are too high to validate using the blockchain for their applications. Just making a profile on ethlance.com is unnecessarily expense due to the gas cost. This results in unrealized demand. When Ethereum scales to 8x transactions I have no doubt the scaling debate will continue, as demand will have increased as well.

mempko 9y ago

The blockchain to me is fundamentally flawed way to look at distributed computation. It really isn't distributed computing because there is a shared agreed and singular "truth". Truly distributed systems must deal with inconsistency instead of trying to keep a consistent transactional view of the world. I'm not sure I want it to scale. The innovation of the blockchain is that it allows people to lend their computers to what looks like a singular system. However, as oulined by this document, the cost is huge in both time and burning the CPU oil. I also don't believe in the transactional spot trade view of the world. It is a narrow way of viewing cooperation and markets. Unbreakable contracts are frightening. Everyone who deals with contracts between peers knows that contracts could be broken and are always negotiable. Unbreakable contracts just seems like a viscous tool for people who have move power over those with less. Because among equals, contracts are meant to be broken, changed, re-negotiated.

zik 9y ago
> It really isn't distributed computing because there is a shared agreed and singular "truth". The last three of the seven scaling options are fully distributed and don't have a single shared truth. > However, as oulined by this document, the cost is huge in both time and burning the CPU oil. This document covers "proof of stake" which does away with the CPU intensive proof of work you're referring to. > Everyone who deals with contracts between peers knows that contracts could be broken and are always negotiable. Ethereum contracts have contract break clauses in them just like legal contracts.
zeroxfe 9y ago
> The blockchain to me is fundamentally flawed way to look at distributed computation. It really isn't distributed computing because there is a shared agreed and singular "truth". This is an odd definition of distributed computing. Blockchains fall squarely under the realm of "distributed consensus protocols", which are quite fundamental to distributed computing.

frozenport 9y ago

>>Conclusion >>Everything will be tokenized and connected by a blockchain one day. WHAT? The guy just explained how the system is thousands of times off from where it should be!

deweller 9y ago

It is important to note that not all of the on-chain solutions are cumulative. Say that increasing the gas limit and swapping virtual machines does get you an 8x improvement each. After both are implemented, you don't don't have a 64x improvement, you have an 8x improvement. All that raising the gas limit does is increase the maximum number of transactions per block. It doesn't matter how fast you can process those transactions if the gas limit is too low to fit all of those transactions into a block. Ethereum is useful and novel and I am a fan. But we are a long, long way from being able to run something like Facebook on it. The "optimistic launch" dates are extremely optimistic.

acover 9y ago
What is needed to get to Facebook level? Is there designs that sacrifice trust in results for performance?
- asdfaoeu 9y ago
  > Is there designs that sacrifice trust in results for performance? Sure is have a look at https://www.mastercard.com/ https://www.mastercard.com/
  - acover 9y ago
    That isn't decentralized
    - polyomino 9y ago
      Neither is ethereum
    - deleted 9y ago
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    - deleted 9y ago
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- gfody 9y ago

fiatjaf 9y ago

The whole blockchain festival doesn't make sense to me. Every blockchain must have a coin attached to it, otherwise there's no incentive to people to watch the blockchain and invest resources in securing it. Bitcoin was about money, not "distributed consensus", that was just a way to achieve money. Now when people talk about blockchains as being the solution to the distributed consensus problem they forget about the money part of it. The most bizarre phenomenon I've seen was Tezos, a coin whose value proposition was that of solving governance through the same blockchain it would use to manage its coins. The creator of Tezos was talking about governance as a consensus problem that could be solved in the same way money was solved by Bitcoin ("everybody must agree, right?") without realizing there were two different concepts of "consensus" being used.

daxfohl 9y ago
Maybe ads. Perhaps a distributed ledger about who has see what ads. That's worth money, and I'm sure marketers would love traceability. So if ad-coin takes over that would be like injecting advertising code into the "CPU registers" of the internet. I can't wait.
- Frogolocalypse 9y ago
  My god. Get that suggestion scrubbed from the interwebs. Imagine a coin that controlled all of the commerce of the world and whose sole allocation of wealth came for the production of advertisements. Ads for ads. No product. Just ads all the way down.
vertex-four 9y ago
Unfortunately, most people don't understand what a blockchain is, including many people working on altcoins. This causes them to make buzzwordy statements which are, to everyone else, nonsensical. "Code is law" being one of them. "Property on the blockchain" being another.
- simias 9y ago
  The lack of technical knowledge in the cryptocurrency community is staggering. It's obvious that a huge number of people are attracted by the "get rich quick" aspect of it all and they lack the basics to really understand the trade-offs and the subtleties of the various blockchain "flavors" and tweaks. So it turns into dumb cargo culting like "Proof of Stake is 100% proven not to work", "Proof of Stake is 100% proven to work", "Lightning Network is going to fix everything and bring world peace", "Lightning Network is going to ruin everything and bring WW3" etc... And you can't have any constructive discussion because if you try to argue for or against a certain technical proposal you'll immediately be called a "paid shill" or a "troll" regardless of your arguments. I've been lurking in the bitcoin subreddits lately and it's really one of the least helpful and constructive communities around. And it's a bit sad because on the technical side the blockchain is pretty damn interesting.

louprado 9y ago

Does anyone have an opinion if new tokens (aka altcoins) created by ERC20[1] are exacerbating Ethereum's network congestion ? My initial reaction is that ERC20 is a parasite vector that will cause long term harm to the value of ETH. Altcoins, to some extent, all compete for speculative dollars. For all I know 80%[2] of the top 800 coins on coinmarketcap.com are ERC20 issued tokens. That means a lower price for ETH due to competition and therefore a lower incentive for the miners who can instantly start mining another currency. Which leads to further latency, less liquidity, and further price depression. [1] ERC20 is a protocol for issuing new tokens on the Ethereum blockchain. [2] Does anyone have a source ? This was a wild guess.

gst 9y ago
> long term harm to the value of ETH I don't see why this is a problem. The goal of the Ethereum developers is to increase the utility of the network, not to artificially inflate the value of ETH. In fact for one of the future Ethereum upgrades it's planned to convert ETH into a ERC20 token, so that it's at the same level as all the other tokens on the network. It wouldn't even get a special status in terms of transaction fees, as (IIRC) the plan is to allow miners to accept whatever tokens they prefer for the gas payment. See https://github.com/ethereum/EIPs/issues/28 https://github.com/ethereum/EIPs/issues/28 and https://www.reddit.com/r/ethereum/comments/572v7t/eth_as_an_erc20_token/d8ohxxb/ https://www.reddit.com/r/ethereum/comments/572v7t/eth_as_an_...
- Jabanga 9y ago
  Neither of those links imply ether will lose its role as input for gas payment. It simply lets ether be used by contracts in the same way tokens are, which allows for greater abstraction of ether transactions. Vlad Zamfir explicitly rejects any call for economic abstraction: https://medium.com/@Vlad_Zamfir/against-economic-abstraction-e27f4cbba5a7 https://medium.com/@Vlad_Zamfir/against-economic-abstraction...
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Jabanga 9y ago

kbody 9y ago

I have hard time believing that a knowledgeable person would have numbers on the scaling improvement column on the scaling efforts list. "3-10x" for ditching EVM for WASM which is at a concept phase, "2-8x" for parallel processing of transactions Even Vlad would laugh at that column. The whole thing feels like a desperate "don't panic sell" when people realize the state of Ethereum's scaling since today its blockchain is increasing at a rate of 1GB/day. I personally hope Ethereum's fans start to be more honest with themselves and do some critical thinking. There are some horrible echo-chambers (/r/ethereum /r/ethtrader) that are traps for newcomers. The closer scaling solution is Raiden (funnily one of the core devs is the one made the infamous hacked DAO contract) which is quite the challenge unless they intend to support a limited subset of Ethereum's capabilities, but they are working on it and looks alive. Apart from that which is a year or so away, Sharding is way off like the list says and will be a huge challenge.

jerguismi 9y ago
Also what is certainly interesting is ethereums difficulty bomb, which should activate later this year. Certainly gives interesting image on ethereums development style, this was implemented to "force" the ethereum devs to implent PoS before it activates. However as far as I understand, the only thing that this forces ethereum devs to do is a hard fork that removes the difficulty bomb somewhere this year. http://www.coindesk.com/ethereums-difficulty-bomb-smoke-no-fire/ http://www.coindesk.com/ethereums-difficulty-bomb-smoke-no-f...
- pietjepuk88 9y ago
  There is only one type of difficult bomb for Ethereum (the ice age), and that is already underway. As linked to in that article, block times would reach about 30 s mid-August (https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_about_the_projected_coin_supply_over/ https://www.reddit.com/r/ethereum/comments/5izcf5/lets_talk_...). The difficulty bomb/ice age is _not_ to force the devs to implement PoS. The reason the ice age(s) exist is to make sure minority chains eventually die. Bitcoin does not have this problem as much, because the difficulty adjustment is much slower, which easily results in hour long (or more) block times for weeks/months for a minority chain. The difficulty adjustment on Ethereum is much faster, so minority chains that arise after a protocol upgrading hard/soft fork could hypothetically survive. To incentivize miners and users to switch to the new chain, there needs to be some other mechanism in place, which is the ice age. The ice age causes block times to keep rising exponentially on the old chain (if no action is taken), so miners will eventually lose their reward and users will not be able to make transactions anymore. They move to the new chain (which postponed the ice age), and eventually the cycle repeats itself. This cycle has happened a few times already. Usually the fork would have already happened by now, so the impending Metropolis fork is different in that it's a bit late and the initial effects of the (ever worsening) ice age are felt.

sudshekhar 9y ago

Couple of questions: - Assume paypal implements a smart contract system. Users have an option to keep their contracts public or encrypt them with their password/random secret key. Defining a contract is like specifying a template. Deploying the contract locks up the requisite sum from the concerned parties. The contract distributes this sum according to its logic, when triggered. Since we don't have mining/redundant copies of data, paypal can afford to charge lower transaction fees overall. The system is altogether more efficient and user privacy is ensured via encrypting the contract to ensure nobody except the owner sees them. Apart from decentralization, what else does ethereum offer over and above this combination? - Despite trying pretty hard, I have been unable to understand the valuations of cryptocurrencies. According to my understanding, bitcoin is a commodity rather than a currency. Like gold, its value resides in how much value people put on it (unlike currencies, which have to be accepted all across their native country). However, unlike gold, bitcoin has no intrinsic value i.e the amount of money somebody would give to just hold onto it for eternity. So the value of bitcoin should be estimated from [value of transactions that happen on the network / number of bitcoins in circulation]. However, most of the transactions happening on the blockchain (IMO) are transactions between cryptocurrencies (eth->bitcoin->eth..). The few that happen in the real world (buying goods/services) are hindered by the continuously changing market value of bitcoin/eth. In this catch-22 (speculation hinders transactions, which makes it tougher to do fair valuation, which encourages speculation), how do we reach a consensus on the value of bitcoin?

isubkhankulov 9y ago
bitcoin's primary value generator since 2011 when Silk Road 1 launched has been uncensored money, or a payment network outside of any single entities control. Afaik, it was not designed with the black market in mind. Since then, people have started buying it because of its scarcity.
Jabanga 9y ago
>Apart from decentralization, what else does ethereum offer over and above this combination? Reliability. PayPal can change its mind and remove the feature. An immutable blockchain won't.

arisAlexis 9y ago

I think people should look into NEO for some innovation

jjcm 9y ago
What scaling benefits does NEO have over ETH/BTC?

ex3ndr 9y ago

Main problem is completely non-user friendly of crypto currencies. Bitcoin is a very simple thing - you have a wallet, number of transactions in your wallet and button to send funds to someone else. Bitcoin was like this since day 1. Ethereum right now is not usable at all. How i suppose to explain it to my mother? In default client always distract me from counting money and sending money. First screen - smart contracts? Okey... how to use it? Even hello world is 20 screens of documentation and involves many weird things like copying "compiled code" or visually comparing hashes. And in couple of years there are no useful applications on ethereum - so why bother to learn things? If you are working in some organization that needs/wants to use blockchain - sure, open sources of ethereum, start your own nodes over kubernetes and try to implement something. But your work will never go to a any public ledger - there are no reason to do so.

philanthropist 9y ago

I have a question that I hope someone can answer for me. I've owned about a dozen or so digital currencies as far back as 2012. Ethereum is one I am still trying to understand. My question is this - How does the functionality of Ethereum (it's blockchain and all that comes with it), convert to the valuation of one ETH being worth $300, or $500, or $100, etc.? How will ETH (the digital currency) be used that will give it these valuations? I understand other currencies. Take Ripples XRP for example; the more banks that are transacting with XRP, the higher the demand is for XRP, which equates to a higher valuation of XRP. So how does Ethereum and ETH get their values? Can companies use Ethereums service without increasing the demand for ETH (digital currency)?

Philosopher 9y ago

So he mentions hard problems in game theory and computer science which have never been solved... with maybe a handful of people working on them... and he thinks it will get done some time before the end of next year?