Scalability is an issue that has been a major hurdle on the road to mass adoption for cryptocurrencies. The rising demand for cryptocurrencies has resulted in a significant rise in load on the existing blockchain network. The biggest cryptocurrencies Bitcoin and Ethereum have been feeling the pressure.
Ethereum has been a revolutionary project that has unlocked the full potential of blockchain technology with the introduction of smart contracts and dApps. For a long time, the Ethereum network has been criticized to be too slow, with only 10 to 15 transactions per second, compared to traditional payment processors.
The network has been updated from time to time, but the scalability problem still persists. To address this situation, a major update dubbed the ‘Istanbul’ Hardfork, has been carried out on the Ethereum blockchain on December 7th. The update introduced more privacy and scaling capabilities alongside six distinct upgrades, or Ethereum Improvement Proposals (EIP) taking the Ethereum network one-step closer to Ethereum 2.0, the much-awaited transition from the existing Proof-of-Work consensus to Proof-of-Stake.
Founder of Ethereum, Vitalik Buterin tweeted last month that the Istanbul Hardfork would allow the Ethereum network to process 3000+ transactions per second. Even though this is a major improvement from the older version, it is still a long way from being a globally decentralized, un-ownable, world computer for executing peer-to-peer contracts.
In order to be able to achieve consensus over the computational needs of the entire world, Ethereum needs to be much faster than 3000 transactions per second. Apart from speed, there are various other factors that come to play.
The “World Computer” needs to be Turing complete. Meaning it should be able to run an infinite number of applications. This is a very costly feat as computation under consensus is always going to be costlier than running consensus less computing.
Alongside this Ethereum must be able to handle more load than the traditional payment systems that are used globally. Even with the Istanbul hard fork, Ethereum can supposedly handle 3000+ transactions per second. Traditional payment processors like Visa can process close to 24,000 transactions per second.
One of the major setbacks if not technology is adoption. The entire crypto industry as a whole is still fairly new and a major part of the world is still clueless about it. In order to be able to reach out on a global scale, it is one of the biggest obstacles on the way.
Ethereum has revolutionized the world of blockchain and is still the most popular blockchain among developers to build on. The World computer state might be a long way, but the enhancements that have been made so far are still keeping Ethereum ahead of the pack while on the road to Ethereum 2.0.