#scalabilityissues

Ethereum could be the world's leading blockchain platform but it's far from being perfect. It has major scalability problems that prevent it from being widely adopted. Fortunately, developers are working around the clock to improve scalability and finally give dApps and digital tokens the speed they deserve. During a recent meeting, they proposed the rollout of “Ethereum 1x” but there were no further details disclosed. Interestingly, the co-founders of Ethereum Vitalik Buterin and Joe Lubin have both attended the mysterious rendezvous. Reportedly, there are already three groups working on the new solution, each of which focuses on different tasks. One group should build an entirely new smart contract mechanism, which should replace the current Ethereum virtual machine. The second group should generate ideas and propose smart contract changes, while the third one is entitled to test proposed changes and ultimately review them. The chances are those working groups are on a hunt for a brand new proof of concept and if we are lucky enough they will come up with something worthy is the following months. The better part is that the small group of Ethereum developers is willing to attract more programmers in the initiative and thus boost further research in the field. Supposedly, there is an upcoming conference that should shed more light on the whole project. Notable, the people behind the initiative are making sure every move they make is publicly available as in recent months critics have been piling up claims that the Ethereum governing body is shying away from decentralization. However, there are rumors that Vitalik Buterin is not yet certain Ethereum needs core changes. Some of the key points hint that he fears the network is going to get much more centralized if developers initiate private calls and private forum. The problem is that decentralized apps that rely on large transaction volumes are practically unusable when built on Ethereum simply because the network does not scale well. However, if developers overcome this major obstacle we may finally see Ehtereum take on the world. Do not confuse “Ethereum 1x” with other scalability solutions such as sharding, Proof-of-Stake, and Serenity. Read the full article

Kevin Rooke who has built a name for himself of a trusted cryptocurrency researcher claims that Ethereum and EOS have only 8 decentralized apps with more than 300 monthly active users. However, this doesn’t stop the two from being multi-billion dollar businesses. This is no surprise at all. In 2017, the co-founder of Coinbase Fred Ehrsam emphasized that Ethereum needs to improve its scalability otherwise it would be unable to handle dApps used by millions. Decentralized networks are nowhere near centralized in terms of speed even though blockchain bears praise the technology as super-fast. Visa is capable of processing tens of thousands of transactions per second and it enjoys millions of customers using its 880 million credit cards. Ethereum’s creator Vitalik Buterin claims that the network would be able to settle a million transactions per second once scaling solutions like Plasma and Sharding are deployed in the years to come. However, poor scalability is not the only reason why dApps remain rather unpopular. The majority of decentralized applications offer poor user interface, which leads to poor user experience, which in turn makes us stick around better looking centralized alternatives. Additionally, in order to fully utilize key features of dApps, one must have some programming experience. Moreover, users often struggle to cover gas costs for running decentralized applications. In a podcast with Joe Rogan, musician Shooter Jennings had a hard time explaining how on earth one sends gas to the Ethereum network once it records information. Martin Koppelman, the creator of Gnosis, shared his point of view on dApps usability: “The numbers we care about is the usage of decentralized applications. And as a next step, the number to look out for is DAPPs that seamlessly interact with each other and draw a benefit from being on the same platform. As a side effect, ultimately the price of ETH will then be a function of the demand for the use of applications in this reliable, open, and interlinked environment.” Developers must collectively work towards the improvement of networks’ scalability capabilities, dApps efficiency, and user experience. They should also make dApps more appealing and easy to deal with, otherwise, we would never switch centralized apps with decentralized ones. Read the full article

The gambling game FOMO congested the Ethereum network once again earlier this month. For a couple of days, it looked like the game is not active at all. Though just recently the small contract once again consumed some 20% before peaking up to 36.4% at some point. To get a taste what this means for the Ethereum network, the regular fees for an Ethereum transaction surged from $0.01 to $0.50. Notably, the Asian daytime hours correspond with high activity rates. Unfortunately, we cannot tell how many sessions it would take before the game is over. The rules of the game are quite simple. The last team or individual to purchase a ticket wins the jackpot. Some comments on Etherscan suggest that the game kicked off with nearly 40% of the current jackpot. As of writing, the wallet address accounts for roughly $4 million worth of Ethereum. Supposedly, the winner would get this reward. Not surprisingly, the interest in the game spikes when the value of Ethereum dips below $300 as the entrance fee is 0.02 ETH. Needless to say, paying such games is risky and most likely pointless as there is a great chance of stumbling upon a scam. In fact, many comments on Etherscan note that a single wallet address is responsible for a great deal of the transactions. Having said that it is possible, the organizers are trying to mimic high transaction volumes in an effort to lure more players. Despite such concerns, the interest in the game is ever growing as more and more people are joining the game, which proves to be rather addictive. What ’s more, it seems like Fomo games are gaining traction once again as they gain popularity in recent weeks. The problem is that along with legitimate games, a lot of scammy copycats emerge as well. One possible explanation is that since the market is crashing, people are looking for an easy way to win some extra cash. On the other hand, they go to show how poorly Ethereum perform when there are many active decentralized apps running on its network. If one dApp can consume 40% of the gas, what would happen if someone deploys 3-4 additional dApps with even greater userbases?   Read the full article

Accenture recently filed a patent, which according to the company would speed up the blockchain transaction process through a specific hardware. In fact, it is the very hardware that the company wants to patent. Accenture emphasizes that blockchain transactions depend on both software and hardware and it exactly hardware problems that the patent is set to tackle. Furthermore, the new hardware should solve not only scalability problems but security issues as well. The company doesn’t neglect security flaws, noting that with the evolution of technology, new kinds of cyber threats emerge as well. An excerpt from the patent application reads: “For example, all or parts of the implementations may be circuitry that includes an instruction processor, such as a Central Processing Unit (CPU), microcontroller, or a microprocessor; or as an Application Specific Integrated Circuit (ASIC), Programmable Logic Device (PLD), or Field Programmable Gate Array (FPGA); or as circuitry that includes discrete logic or other circuit components, including analog circuit components, digital circuit components or both; or any combination thereof.” Notably, Accenture argues that execution instructions can be stored in various mediums including CDROM, optical disks, hard drives, flash memory, Erasable Programmable Read Only Memory, Read Only Memory, and Random Access Memory. The recent patent follows this year’s trend of big companies filing for blockchain-related patents. Moreover, this is not the first time Accenture files a blockchain patent. Two years ago the company had the controversial idea of launching a blockchain prototype which would allow administrators to erase, modify and edit blocks on the network. Back then the Accenture executive Richard Lumb insisted that pure decentralization would negatively impact banks. In his own words: “For decentralized cryptocurrency systems, such permanent accounting has been crucial in building trust and faith among participants. But for financial services institutions faced with a myriad of risk and regulatory requirements, absolute immutability is a potential roadblock.” It will be interesting to see how Accenture puts their patent to practice. The crypto community has seen enough overhyped projects. Most of them promise two things - to solve the current scalability issues and to improve security. Accenture’s patent promises the same things but would it live up to the expectations?   Read the full article

Stripe was among the first digital payments processors to deploy a tool for merchants to accept cryptocurrency payments. This happened in 2015 and for many of us, it was a sign that cryptos are here to stay. Well, Stripe joined the dark side this April, when it dropped support for crypto payments. But why? According to the COO of Stripe, Claire Hughes Johnson, blockchain-powered payments offer close to nothing. Johnson described them as overhyped, sluggish, and having to real life use. We cannot but agree with the point that they are indeed slow. Once a blockchain network is congested it is unable to process transactions on time. Scalability is an issue we are all familiar with. Hughes Johnson admitted that sometimes merchants had to open a second pending transaction because crypto prices had fluctuated severely between the start and the end of the first transaction. This makes her think if blockchains and cryptocurrencies are practical at all: “The killer app for Bitcoin out there today is ransomware,” hinting that cybercriminals are the only ones taking advantage of these new technologies. Some might find Hughes Johnson too harsh but my advice is to take off the pink glasses. The reality is that blockchain technologies are nowhere near conquering the world. What disruption when Visa and MasterCard settle their transactions faster despite being old technologies? Distributed ledgers might have great potential but so far, they fail to live up to the expectations, especially in the finance sector. Johnson’s reality check continued when she dumped DLTs stating they are overhyped. “I do think we’ve reached that jump the shark moment where you just say ‘da-da-da blockchain’,” she insisted, further claiming that the US Securities and Exchange Commission has every right to crack down on fraudulent blockchain projects. Even more sobering was her assessment that blockchain technologies are not catching up with already mainstream tools in the next decade or so. However, we have to note that we already see how blockchain technologies prove beneficial in several areas such as charity and supply chains. For instance, NANO donations are helping out people in Venezuela, which is in the deepest recession in modern times. Read the full article

Someone tried to clog the NEO network by sending hundreds of thousands of free transactions over and over again. The attack took place last Friday but it wasn’t until Monday that the startup officially approached the problem. Apart from the network congestion, the blockchain-powered exchange Switcheo was affected as well as NEON Wallet and Effect Force platform. In a blog post from July 29, 2018, NEO explained: “The NEO blockchain recently experienced network congestion as a result of a spam attack, leaving users struggling to claim GAS or submit their own transactions in a timely manner. The spam appeared in the form of empty invocations, allowing thousands of transactions to be submitted without any actual transfer of funds. It is unknown at this time whether this was caused by a bug in a contract’s code, or was performed with malicious intent”. However, the company assures users that despite the attack their funds are safe. One of the first to alert the community about the spam attack was Effect.AI (EFX). The decentralized artificial intelligence platform is one of the most promising NEO clients. Recently it launched its Effect Force on the top of NEO MainNet. The company took to Twitter to alert NEO users about the problem: “We regret to inform our dedicated Effect Force private beta workers that we are closing the Effect Force platform due to the current major issues with the NEO blockchain. We will keep you posted on the developments.” The director of R&D at NEO Global Development, Peter Lin, published a post on Medium on Saturday giving more inside information: “Recently, the number of transactions on the NEO network has increased significantly. Some of them are meaningless and could be considered as an attack. NEO is designed to be a high performance blockchain system that can handle high transactions per second (TPS) scenarios in event such as this NEO has a parameter called “MaxTransactionsPerBlock” which is set to 500 now. The purpose of this parameter is to protect NEO from an infinite number of transactions flooding the network.” NEO is one of the blockchain projects touted to challenge Ethereum. However, it is far from being a contender so far as Ethereum is still preferred by blockchain developers. In conclusion, the recent event only proves that blockchain is not ready yet for large-scale transaction volumes. Read the full article

Stripe was among the first digital payments processors to deploy a tool for merchants to accept cryptocurrency payments. This happened in 2015 and for many of us, it was a sign that cryptos are here to stay. Well, Stripe joined the dark side this April, when it dropped support for crypto payments. But why? According to the COO of Stripe, Claire Hughes Johnson, blockchain-powered payments offer close to nothing. Johnson described them as overhyped, sluggish, and having to real life use. We cannot but agree with the point that they are indeed slow. Once a blockchain network is congested it is unable to process transactions on time. Scalability is an issue we are all familiar with. Hughes Johnson admitted that sometimes merchants had to open a second pending transaction because crypto prices had fluctuated severely between the start and the end of the first transaction. This makes her think if blockchains and cryptocurrencies are practical at all: “The killer app for Bitcoin out there today is ransomware,” hinting that cybercriminals are the only ones taking advantage of these new technologies. Some might find Hughes Johnson too harsh but my advice is to take off the pink glasses. The reality is that blockchain technologies are nowhere near conquering the world. What disruption when Visa and MasterCard settle their transactions faster despite being old technologies? Distributed ledgers might have great potential but so far, they fail to live up to the expectations, especially in the finance sector. Johnson’s reality check continued when she dumped DLTs stating they are overhyped. “I do think we’ve reached that jump the shark moment where you just say ‘da-da-da blockchain’,” she insisted, further claiming that the US Securities and Exchange Commission has every right to crack down on fraudulent blockchain projects. Even more sobering was her assessment that blockchain technologies are not catching up with already mainstream tools in the next decade or so. However, we have to note that we already see how blockchain technologies prove beneficial in several areas such as charity and supply chains. For instance, NANO donations are helping out people in Venezuela, which is in the deepest recession in modern times. Read the full article