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Ethereum Will Eventually Achieve 1 Million Transactions Per ...
Ethereum

Ethereum Will Eventually Achieve 1 Million Transactions Per Second: Vitalik Buterin

(Last Updated On: June 3, 2018)

Speaking in a recent OmiseGO AMA session, Vitalik Buterin, the co-founder of Ethereum, glorified ethereum that with second-layer solutions such as Sharding and Plasma, the Ethereum network will eventually be able to process 1 million transactions per second and potentially more than 100 million transactions per second.

Vitalik’s Expectation From the DApp Platforms To Solve Scalability Issues

Scalability issues are core issues that the Ethereum blockchain protocol and decentralized blockchain networks are struggling to deal with. This has previously been highlighted by Vitalik Buterin at various events.

 

In the Disrupt SF 2017 conference hosted by TechCrunch,  during an interview session with venture capital investor Naval Ravikant in September 2017 it was noted by Vitalik that bitcoin and Ethereum are processing three to six transactions per second. He further emphasized that blockchain needs to process hundreds of thousands of transactions per second to meet the support level required for large-scale payment networks such as Visa, stock markets like Nasdaq, and Internet of Things (IoT) networks.

 

Sharding and plasma are second-layer solutions expected to empower the Ethereum network to process 1 million transactions per second. ‘Sharding’ draws from a traditional scaling technique called ‘database sharding’, which effectively breaks a database into pieces and puts each part on a different server. Sharding removes the requirement of involving full nodes those which store the full state of the network and every transaction.

 

Ethereum Plasma brought a scaling solution that may make Ethereum to be able to process many more transactions per second. It is similar to the Bitcoin Lightning Network it is a technique for conducting off-chain transactions while relying on the underlying Ethereum blockchain to ground its security.

 

What Vitalik Buterin Said :

Bitcoin is currently processing a bit less than three transactions per second and if it goes close to four, it is already at peak capacity. Ethereum has been doing five per second and if it goes above six, then it is also 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.

Regarding Second Layer Solution Buterin Further Added :

The reason I think layer 1 and layer 2 [networks] are complementary is because ultimately, if you look at the math, the scalability gains from the layer 1 improvements and layer 2 improvements do ultimately 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 eventually 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 amount of exits, and despite resolutions.

Transactions Per Second A Comparative Study

 

Ethereum 2017: 5 per second
Uber: 12 rides per second
Paypal: 100s per second
Visa: 1000s per second
Stock Exchanges: 10,000s per second
IoT: 100,000s per second