Ethereum 2.0 and the Future of Scalable Blockchain

There’s new ways to think about the blockchain stack in 2018

Ethereum

Ethereum’s 2.0 road map attempts to deal with scalability issues, primarily via Proof-of-stake (Beacon Chain, Casper FFG), Sharding and eWASM. Ethereum has a fair chance of becoming a scalable global platform for collaboration. However, while they are a first-mover, they may not achieve scalability first.

To arrive at a platform for new economic systems will require a level of scalability that might honestly take Ethereum years to achieve. During that time, any number of other projects could eclipse it importantly in the scalability aspect; this is why it’s so important.

Increasingly Ethereum has off-chain techniques such as Plasma, Plasma Cash and State Channels. However, when even Vitalik Buterin says present day blockchain “sucks”, you know today’s public blockchains could be disrupted. Ethereum does decentralization better; however Silicon Valley and China can beat them to scalability without the decentralization aspect — to monetize the public blockchain model better.

Ethereum has attracted developers to blockchain, built communities, facilitated blockchain startups to achieve viability and introduced many protocols into how we think of dApp development. The entire ecosystem of open-source software projects working on building different aspects of Ethereum is rather impressive.

• Smart Contract Languages (Solidity, Vyper)
• RPC Libraries (web3js, ethers, Nethereum)
• Development Tools (truffle, ganache, solc, solium)

Ethereum has given us hope for things like open-source decentralized systems, though the scalability bottleneck appears rather serious for Ethereum’s future sustainability. However, Ethereum is migrating its consensus protocol from proof-of-work to proof-of stake. It’s trying to adapt. By 2020, its fate will be known. The next couple of years are critical.

If Sharding is how Ethereum will realize the performance gains necessary to scale, it will take years!

Dfinity

Dfinity has raised $167 million according to Crunchbase, it’s actually closer to $200 million. DFINITY is your classical copy cat, where it’s taken many of the concepts of Ethereum and replicated them with a flashier brand. The preposterous analogies here are blindingly of the “fake it till you make it” variety. Cloud 3.0, The World Computer, Ethereum on Steroids, The NASA of blockchain — but in spite of the marketing gimmicks, the terminology of their stack is rather appealing.

Dfinity proposes a decentralized cloud model. It sees itself as being similar to Ethereum but with fewer performance restrictions that will ultimately have unlimited capacity.

Dfinity includes an innovative governance system called the Blockchain Nervous System (BNS) that is by design able to implement retroactive state changes without the need/option to fork.

Dfinity aims to finalize computations at least 50X faster than on Ethereum, so it often compares itself to Ethereum as its baseline. Dfinity likes to invent terms and audaciously wants to be that neighborhood virtual computer in cyberspace that will support software systems, business applications and enterprise IT systems.

Dfinity, for all its buzzword prowess, is probably one of the contenders to scale public blockchains in the race to scalability. However, in some respects Dfinity sees itself like a blockchain Cloud whereby it could improve on the traditional tech stack and one day perhaps rival AWS, Azure, Google Cloud. But then who knows, when it’s calling itself an Internet Computer, akin to a blockchain supercomputer?

Cardano

Cardano is very well respected and sees itself as a technological platform that will be capable of running financial applications currently used every day by individuals, organisations and governments all around the world. Its academic roots are very strong with peer-reviewed quality.

Cardano offers scalability and security through layered architecture and might be considered more mature than Ethereum and NEO. With an emphasis on scientific philosophy and peer-reviewed academic research, it’s less gamified than EOS and is rooted as a second-generation blockchain.

With a founder who was one of the original founders of Ethereum, he sees blockchain as the leading and dominant model of technology by 2030. With startups like Bakkt, indeed, the once visionary intersection of cryptocurrency and Wall Street appears to be manifesting.

Cardano has ties in Hong Kong and Japan and a strong academic basis. With a lack of provisions for scalability he believes Ethereum is flawed and this is why Cardano too must be considered in the race of public blockchains to achieve scalability first.

Cardano focus on solving problems of

• Scalability
• Interoperability
• Sustainability

It definitely feels on point without being too gimmicky or trying to raise too much capital. Cardano’s emphasis on philosophy and science feels credible in the sense of building a “collection of design principles, engineering best practices, and avenues for exploration.”

Cardano sees scalability as a three-headed hydra:

• Transactions per second/ Throughput
• Network
• Data Scaling

The consensus mechanism of Cardano is called Ouroboros. It is a provably secure proof-of-stake algorithm that was peer reviewed back in 2017. Proof of stake will make the entire mining process virtual and replace miners with validators. Cardano is well underway to implementing how next-gen decentralization networks might work: for instance, Cardano is looking at a new type of technology called RINA, Recursive Inter-Network Architecture created by John Day.

RINA’s goal is to create a heterogeneous network which promises to give: