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What will be the final scaling solution for Ethereum?

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What will be the final scaling solution for Ethereum?
Highlights:
  • Sacrifices have to be made between speed, security, and decentralization with sidechains.

  • Rollups aren’t the definitive solution, but they do increase the usability of the mainnet.

Scalability in Ethereum was the central theme of Patricio Lopez’s presentation during the ETHSantiago 2022 conference cycle. most commonly used scalability solutions for cryptocurrency networks today. ,

One of the main complaints about Ethereum from its users is How much can transaction fees be? on certain occasions. The reason for these fee increases is Ethereum’s limited ability to handle high volume transactions.

The Chilean developer clarified that Increasing the commission is the network’s own decongestion strategy And, as the transaction load is reduced, reduce the fees again to more affordable prices.

Various solutions have been proposed over the years for the scalability of networks like Ethereum, of which Lopez chose four to detail their workings, advantages and disadvantages. above all These are the solutions of the second layerThis means that they do not work directly on Ethereum, but outside its ledger (blockchain).

Scalping solutions for Ethereum

payment channel

First in the list of second layer scalability solutions for Ethereum is the payment channel. Lopez acknowledged that it was a technology originally designed for bitcoin, known as the Lightning Network or Lightning Network (LN).

Payment channel technology includes a network in which person-to-person transfers take place And that he is able to boil down many works made outside of the main series to just one within it.

Payment channels have their side in that they are fast, near-instantaneous, and their effectiveness has already been proven for the Bitcoin Lightning Network. However, according to Lopez, the downside of this technology is that its use is limited to making payments and requires being online to accept transfers. On the other hand, the freezing of cash can also be detrimental, since it is necessary to leave the funds in charge of the smart contract while the payment channel is open.

Ethereum already has a network of payment channels known as RaidenIn May this year, Cryptonoticious announced that Raiden would be working closely with Arbitrum, an Ethereum rollup, aimed at reducing the cost of opening payment channels.

sidechain or side chain

As their name suggests, sidechains are blockchains parallel to a main chain. They have bridges that communicate with the main network to send and receive transactions.

The advantages offered by sidechains include their speed, versatility (they can be used to send payments, issue NFTs, etc.) and they are fully compatible with the Ethereum mainchain.

Side chains, like everything else, have their downsides. They are less secure and more centralized, because They have a small number of nodes that validate their transactions, It also offers less guarantee of durability over time. Added to this is the risk of bridges, which are often the target of hackers.

Sidechains, like Gnosis, use a bridge that allows them to transact between themselves and the main chain (Ethereum). Source: ETH Tiago 2022.

For example, this year saw one of the costliest attacks in blockchain history, the Ronin Network Bridge Attack. CryptoNoticias covered the event in which more than 170,000 ETH was withdrawn, which at the time was equivalent to around 600 million USD.

accumulated losses

Lopez mentioned two types of Ethereum rollups, Optimistic cumulative loss and ZK cumulative loss, In both cases, it is required that data processing and storage be maintained outside the main network. They also participate in the delegation of a smart contract, which is responsible for mirroring everything that happens on the chain managed by these rollups to the main chain.

The difference between optimistic rollup and ZK rollup is in the status updates of the smart contract. In the case of optimistic accumulations, a period is granted to prove that the modification proposed by the user is not fraudulent. At the same time, in the ZK cumulation, cryptographic proofs must be presented in the smart contract in order to change state, whether it is a transfer of stablecoins or tokens.

Ethereum rollups favor them in that they are inexpensive to operate and transactions are completed quickly. The disadvantage of using rollups is that Its implementation involves a fairly complex level of cryptography. That Patricio López himself admitted it is difficult to understand. To this was added that they can be programmed in languages ​​other than Solidity, the native programming language of Ethereum, so they will not be compatible.

Closing out his presentation, Lopez urged projects interested in using one of these scalability solutions to evaluate the features they need and choose the best one to meet those needs.

What will be the final scaling solution for Ethereum?
Scalability will continue to be an ongoing pursuit in the development of cryptocurrency networks. Source: ETH Tiago 2022.

The proponent concluded that none of the solutions presented are definitive and made an analogy stating that it does not matter whether the highway has two, four, six canals or lanes or more, There will always be a situation where there is overcrowdingTherefore, scalability will continue to be a goal for cryptocurrency and blockchain developers.

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