Ethereum will Eventually Reach 1 Million Transactions Per Second, says Vitalik Buterin
June 4, 2018 3:46 pm
Ethereum Creator Says, Ethereum will Eventually Achieve 1 Million Transactions Per Second
Mr. Vitalik Buterin, the creator of Ethereum, has described in a recent OmiseGO AMA session that with second layer solution such as Sharding and Plasma, the Ethereum network will be ultimately able to process 1million transaction per second and probably more than 100 million transactions per second.
Earlier, at various conferences and presentations, Vitalik Buterin indicated that the Ethereum Blockchain protocol and decentralized blockchain networks are struggling to deal with scalability issues.
In September 2017, during an interview with venture capital investor Naval Ravikant at the Disrupt SF 2017 conference hosted by TechCrunch, Vitalik Buterin remarked that Bitcoin and Ethereum have been processing 3 to 6 transactions per seconds at peak capacity. He continued that the blockchain to support large-scale payment networks, for instance, Visa, Internet of Things (IoT) networks and stock markets like Nasdaq, it will have to process hundreds of thousands of transactions per second.
Vitalik Buterin said:
“Bitcoin is currently processing a bit less than three transactions per second, and if it goes close to four, it is now at peak capacity. Ethereum has been doing five per second, and if it goes above six, then it is too 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.”
Buterin stated, during the OmiseGO AMA session, that second layer scaling solutions that are currently tested on the Ethereum testnet, could allow the Ethereum blockchain network to support large-scale decentralized applications with millions of clients by taking an innovative way in optimizing the blockchain.
Sharding in distinct splits a blockchain network to shards which are then equipped with a group of nodes that are tasked to process information of specific shards. With Sharding allowed, all nodes on the blockchain are not needed to process every single bit of data located on the blockchain, optimizing the process of settling information.
Plasma, a solution created by Vitalik Buterin and Lightning Network co-author Joseph Poon, functions likewise to Bitcoin’s Lightning Network, as it permits Ethereum to process micropayments by building child blockchain networks within the main blockchains to process more data quickly. Leveraging the security of the main Ethereum protocol and consequently not leaving the network vulnerable to potential attacks.
Vitalik Buterin described:
“The reason I think layer 1 and layer 2 [networks] are complementary is that eventually if you look at the math, the scalability gains from the layer one improvements and layer two improvements do eventually multiply with each other. If you have a Sharding solution, the Sharding solution itself might increase the scalability of Ethereum by a factor of 100, or ultimately even more. But then, if you do Plasma on top of the scalability solution, then what that means is, you’re not just doing 100 times of the amount of activity but you are doing 100 times the amount of entrances, the number of exits, and despite resolutions.”
Vitalik Buterin further noted that the synergy between layer one and layer two solutions would enhance the scalability of Ethereum by 10,000x enabling the network to process millions of transactions per second and supporting most applications.
Vitalik Buterin included:
“So if you get a 100x from Sharding and a 100x from Plasma, those two essentially give you a 10,000x scalability gain, which primarily implies blockchains will be robust enough to handle most applications most people are trying to do with them.”