In BeyondBlock Taipei 2017, Ethereum inventor and co-founder Vitalik Buterin had described the major changes in Ethereum’s architecture. He said these changes may be implemented in the following years to improve the privacy, consensus and smart contract safety, and scalability of Ethereum.
In his talk on November 25 which focused on the scalability of Ethereum, Buterin didn’t seem too worried about competition, saying, “The Ethereum killer is Ethereum, the Ethereum of China is Ethereum, the Ethereum of Taiwan is Ethereum…2.0.”
And there is a reason for his optimism. Ethereum is booming with its price climbing and reaching almost $500. It has also been handling more transactions than all major blockchains combined.
Among the important properties blockchain systems must have are decentralization, scalability, and security. While off-chain solutions are useful, they are limited. Buterin says it is very easy to have two of these properties, but it is difficult to have all three. The goal of Ethereum is to achieve all three at the same time. As one of Buterin’s slides states, “We want to scale to thousands of transactions per second, on chain, without any supernodes.”
Sharding is dividing a blockchain network into smaller component networks called shards. These shards are capable of processing transactions in parallel. Sharding a promising method to achieve high throughputs similar to the thousands of transactions per second of traditional payment networks like Visa and Mastercard.
In his talk, Buterin describes sharding in terms of universes: “You can think of (sharding) as, in a fairly simple version, creating a blockchain where you have, let’s say, a hundred different universes, and each of these universes is a different account space. So you can have an account in some universe or you can have a contract in some universe and you can send a transaction in some universe, and if you send a transaction in some universe it only affects stuff in some universe.”
“But these kind of 100 universes are not just separate blockchains; they are systems that are also interconnected with each other. Particularly, they share consensus. So in order to break even one of them, you have to break the whole thing.”
Buterin also described relatively easy and sophisticated ways of implementing sharding in the Ethereum blockchain. He outlined a sharding roadmap which foresees the creation of new “universes” that don’t affect the main chain while allowing iterative experimentation. This includes introducing higher levels of scalability, particularly starting with “quadratic scalability as nodes validate certain shards and act as light clients for other shards.”
Buterin also mentioned that zero-knowledge proof privacy technology equivalent to Z-cash was implemented last month in the Byzantium Ethereum upgrade. The upgrade offers application developers new ways to implement tighter privacy, and these new privacy tools permit showing transactions to specific parties while still hiding them from public view. Buterin even went as far as saying that the privacy problem is three-quarters of the way to being solved.
Proof of work versus proof of stake
One of the major upgrades to Ethereum is the introduction of the Proof of Stake (PoS) in Casper which may be ready by next summer. Ethereum will transition from pure Proof of Work (PoW) to hybrid PoW/PoS with Casper’s first release. Buterin noted that “in this scheme, all of the proof-of-work mechanics will continue to exist, but additional proof-of-stake mechanics will be added.”
PoS is seen as a necessary development mainly because of the need to lessen the energy requirements of PoW blockchains such as the current versions of Ethereum and Bitcoin. Power Compare recently reported that Bitcoin mining consumes as much power as 159 countries. Buterin himself admitted that Ethereum consumes just as much power.
Security of Smart Contracts
Another main innovation introduced by Ethereum are Smart Contracts implemented with Turing-complete programming languages. While these contracts have countless applications and are moving lots of money, the security and safety of these contracts have been questioned. Ethereum will soon introduce formal verification for smart contracts as confirmed by Buterin. He further stated that a new Python-like smart-contract programming language, Viper, is currently being implemented to enable the development of safer Ethereum applications.
Though he hasn’t said anything he had not yet previously mentioned in his other talks and papers, Buterin had given useful confirmation and summary of the ambitious development roadmap of Ethereum.