Speaking to Bloomberg, Vitalik Buterin spoke openly about various aspects of Ethereum, including perhaps the most difficult problem it has faced so far, scalability.
The Ethereum ecosystem offers the most dApps and has the highest overall value included in native DeFi protocols. However, some say it has fallen victim to its own success, which is evident in high gas charges and a bottleneck system.
The current throughput for Ethereum is around 10 transactions per second (TPS). Compare this to XRP, which is supposed to process 1,500 TPS consistently but can manage up to 65,000 TPS.
Competing for its crown means that Ethereum must overcome its scalability problems.
Ethereum and its scalability problem
Host Emily Chang opened the point, describing the above problems as “growing pains,” which led to the question of why they exist in the first place.
In response to the question, Buterin simplified it by calling it a supply and demand problem. He said the result of user competition for limited block capacity is driving up transaction fees.
“If the number of people wanting to send transactions increases, but the space for transactions in the chain does not increase, then all those people who offer transactions against each other are bidding. And only those who are willing to pay a really high amount can actually get on board. “
As for the solutions, Buterin admitted that the only way to solve the problem is to increase the transaction capacity to handle more user traffic.
Since Ethereum was founded, Buterin has said the development team has implemented incremental improvements. To date, these upgrades have increased scalability by a factor of five.
“We’ve made all kinds of incremental improvements to the blockchain clients and protocol code over the past five years. The scalability of Ethereum has increased by a factor of about five since the start of the project. “
The London Hard Fork and EIP 1559
In the most hyped recent improvement, EIP 1559 went live under the London hard fork earlier this month.
When the developers first launched the proposal, they sold it on the premise of countering rising gas charges. But only by making them more predictable. That alone does not necessarily mean lower gas charges, even if this was hoped by users.
Recently, Buterin claimed that on-chain capacity to London increased by 9%. In theory, this should have resulted in lower fees due to less competition for block space.
However, the analysis of average gas prices shows a slight increase since it was launched in London. Currently at 57 gwei versus 46 gwei on August 4th (the day before the hard fork).
Maybe it’s too early to say EIP 1559 wasn’t worth the effort. In any case, the developers had always stuck to their introduction, which cannot lead to lower gas charges.
But on an initial exam, ETH 2.0 may be the only way Ethereum can solve its scalability problems.
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