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Ethereum 2.0 and the Future of Scalable Blockchain

Traders Magazine Online News, January 15, 2019

Michael K. Spencer

Ethereum

Ethereum’s 2.0 road map attempts to deal with scalability issues, primarily via Proof-of-stake (Beacon Chain, Casper FFG), Sharding and eWASM. Ethereum has a fair chance of becoming a scalable global platform for collaboration. However, while they are a first-mover, they may not achieve scalability first.

To arrive at a platform for new economic systems will require a level of scalability that might honestly take Ethereum years to achieve. During that time, any number of other projects could eclipse it importantly in the scalability aspect; this is why it’s so important.

Increasingly Ethereum has off-chain techniques such as PlasmaPlasma Cashand State Channels. However, when even Vitalik Buterin says present day blockchain “sucks”, you know today’s public blockchains could be disrupted. Ethereum does decentralization better; however Silicon Valley and China can beat them to scalability without the decentralization aspect?—?to monetize the public blockchain model better.

Ethereum has attracted developers to blockchain, built communities, facilitated blockchain startups to achieve viability and introduced many protocols into how we think of dApp development. The entire ecosystem of open-source software projects working on building different aspects of Ethereum is rather impressive.

  • Smart Contract Languages (Solidity, Vyper)
  • RPC Libraries (web3js, ethers, Nethereum)
  • Development Tools (truffle, ganache, solc, solium)

Ethereum has given us hope for things like open-source decentralized systems, though the scalability bottleneck appears rather serious for Ethereum’s future sustainability. However, Ethereum is migrating its consensus protocol from proof-of-work to proof-of stake. It’s trying to adapt. By 2020, its fate will be known. The next couple of years are critical.

If Sharding is how Ethereum will realize the performance gains necessary to scale, it will take years!

Dfinity

Dfinity has raised $167 million according to Crunchbase, it’s actually closer to $200 million. DFINITY is your classical copy cat, where it’s taken many of the concepts of Ethereum and replicated them with a flashier brand. The preposterous analogies here are blindingly of the “fake it till you make it” variety. Cloud 3.0, The World ComputerEthereum on Steroids, The NASA of blockchain?—?but in spite of the marketing gimmicks, the terminology of their stack is rather appealing.

Dfinity proposes a decentralized cloud model. It sees itself as being similar to Ethereum but with fewer performance restrictions that will ultimately have unlimited capacity.

Dfinity includes an innovative governance system called the Blockchain Nervous System (BNS) that is by design able to implement retroactive state changes without the need/option to fork.

Dfinity aims to finalize computations at least 50X faster than on Ethereum, so it often compares itself to Ethereum as its baseline. Dfinity likes to invent terms and audaciously wants to be that neighborhood virtual computer in cyberspace that will support software systems, business applications and enterprise IT systems.

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