Connect with us

Ethereum

Ethereum [ETH]’s Sharding and Plasma – Will it improve scalability?

Vinod KA

Published

on

Ethereum [ETH]'s Sharding and Plasma - Will it improve scalability?
Source: Pixabay

Sharding is the process of splitting or partitioning the database to benefit from the computing power of more than one server. When it comes to the blockchain, especially Ethereum’s, developers spilt the blockchain into parts that would run on different servers. Several hundreds of millions of dollars’ worth of decentralized application and blockchain projects have now been launched using Ethereum’s protocol which is based on ‘smart contracts’.

Ethereum has been adopted by many Fortune 500 conglomerates like Microsoft, JPMorgan, ING, Intel and Banco Bilbao Vizcaya Argentaria [BBVA] to automate certain operations and create decentralized applications on top of the Ethereum protocol. Ethereum was brought to the forefront through the formation of Enterprise Ethereum Alliance and it streamlined its performance altogether.

Vlad Zamfir, a researcher at Ethereum Foundation says:

“I like to spend my time working on blockchain sharding, which I regard as the only true blockchain scaling solution, and which I think will improve the scalabilty of the blockchain without sacrificing the security of the blockchain and the trust model.”

Plasma is a solution released by Ethereum’s co-founder Vitalik Buterin and Bitcoin’s Lightning Network co-author Joseph Poon which scales the Ethereum network by eliminating unnecessary data from transactions and optimizing smart contracts.

They define plasma in a paper titled ‘Plasma: Scalable Autonomous Smart Contracts’ as:



“Plasma is a proposed framework for incentivized and enforced execution of ‘smart contracts’ which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide.”

He added:

“In spite of helping in the blockchain, it actually makes it less secure as it makes the censorship much more profitable. These solutions span different trust models and require non-miner/validator nodes to be available to make settlement transactions”

Many experts like Fred Ehrsam, co-founder of Coinbase are of the opinion that such scaling solutions will be the determining factor in improving Ethereum’s capacity to support large-scale decentralized applications. However, Zamfir contradicts by saying that off-chain and second-layer scaling solutions cannot be used as everyone thinks.





Subscribe to AMBCrypto’s Newsletter




Follow us on Telegram | Twitter | Facebook



Vinod KA is an intern at AMBCrypto who has been analyzing the cryptocurrency market trends for several months now. He joined the company out of sheer interest in the cryptocurrency world and is fascinated by its dominance in the financial world. He does not hold value in any cryptocurrencies as of now.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Ethereum

Ethereum [ETH] might have caught a break from bears due to formation of ‘Golden Cross’

Avatar

Published

on

Ethereum [ETH] might have caught a break from bears due to formation of 'Golden Cross'
Source: Unsplash

Ether, more commonly known as Ethereum, is the world’s second largest cryptocurrency and it might have turned bullish due to the initiation of the ‘Golden Cross’ in the daily chart. Golden Cross, is when the 50-day simple moving average crosses above the 200-day simple moving average, which indicates that the price has turned bullish and that the cryptocurrency has bottomed.

Source: TradingView

Historically, Ethereum’s last Golden Cross took place in February 2017, when the price of ETH was ~$10; the price after this cross was bumped to $1,600, which was a meteoric rise of 15,000%. As bullish as this sounds, this might not be the good news that the crypto community is hoping for, as the ‘Golden Cross’ isn’t absolute and there are times when the crossover could be a fakeout. Crossover fakeouts had occurred for Bitcoin in 2014.

The weekly chart for Ethereum has been consistently forming higher highs since 2019, which is a bullish indication. The MACD indicator and the RSI indicators are both indicating a steady rise since 2019.

All aboard the ‘Speculation Train’

If another meteoric rise is to be expected from the crypto ecosystem, the price has to undergo a parabolic rise. The price of Ethereum at press time was $174 and had a market cap of $18 billion; assuming approximately 10,000% increase [instead of the 15,000% rise], the price of Ethereum would reach approximately $8,000 by March 2020.



A Reddit user @alkalinegs commented:

“if you look at the last golden cross early 2017 it took a few days till something happend. death cross 2018 even resulted in a bulltrap. -> dont expect an immediate reaction.”

Quite a few people use the exponential moving averages and disagree with the use of Simple Moving Averages, which is opinionated. Another Reddit user, @DeliciousPayDay commented:

“I strongly disagree. SMA 200 is more important and everyone in crypto looks at it. After breaking the 200MA at $151 ETH went straight to $180 before being sold off, and bounced directly off the 200MA the next day turning resistance into support. The 50/200 golden cross just happened on the SMA and the last time that happened ETH went from $12 to $1400.”





Subscribe to AMBCrypto’s Newsletter


Continue Reading

Trending