Ethereum (ETH) is probably the largest and most famous Smart Contract platform. However, the network seems to come slowly to its limits. A few days ago has increased the capacity of the Ethereum network for the most unexpected. This leads automatically to an increase in the maximum number of transactions per second (TPS). However, this unexpected development in the case of Ethereum raises some critical questions and possible hazards.In this article, we will the capacity increase of Ethereum on the track and have a look, whether this change in the meaning of discreet is decentralization and the Problem of scalability can be solved.You don’t want to buy Bitcoin, Ethereum & co. know, but where? To decide the right provider is not always easy. Therefore, we recommend that you take the time to look at our Bitcoin Broker & exchanges comparison. Often several providers are already required to really get all the Cryptos to cover. See for yourself: Bitcoin Broker & stock exchange compared with that now read.
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Ethereum (ETH) increased Gas Limit by 25%
Vitalik Buterin, founder of Ethereum, said last week on Twitter that the Block producer (Miner) have started to increase the throttle Limit. The reason seems to be the overloaded Ethereum network, which has come to its Limits. Gas is not a unit in the Ethereum network, which is used to pack Smart Contracts in a Block. This is basically the fee that is payable to a Miner to. This is always done in Ethereum and will only be charged internally in the Gas. The Gas Limit in the case of Ethereum is to compare with the maximum number of transactions per Block at Bitcoin.For several days, the Gas Limit is increased up to 10 million per Block. This is an increase of approximately 25% compared to the previous week and automatically leads to more transactions per Block and, accordingly, per second. As a result, only advantages such as a possible fee reduction, but also disadvantages in the Form of an enlargement of the blocks and, accordingly, the entire Blockchain will not occur. Thus, it is for Nodes increasingly more expensive, and to operate difficult the entire network.
Ethereum overloaded by Tether and Dapps
We come now to the possible reasons of the usage of Ethereum. Among the main drivers of the Stablecoin Tether (USDT) and the gaming platform Fair Win is seen. Tether transactions according to the Coin Metrics approximately 25% of all transactions on the Ethereum network. Also Buterin spoke to the current Problem:
Scalability is a major Bottleneck, since the Ethereum Blockchain is almost full.
Currently, about 45% of all transactions are taken on an Ethereum Smart Contracts Dapps. The reason for this is a variety of new Dapps and the increased usage of these are. Accordingly, also shot a few days ago, the charges on Ethereum in the altitude and have exceeded the of Bitcoin. For some, it is a sign that the Ethereum network will be increasingly in demand, for others, it is a sign that the network has reached its limits and for the time being, no meaningful solution for this Problem.
Decentralisation of Ethereum is questionable
We now come to the question of how this unexpected increase in the Gas Limits the impact on the Ethereum network. The decentralization of the Ethereum network is a “secret Hardfork” more than questionable. A small number of developers and miners, has been sufficient to increase the Gas Limit and to change the Ethereum Protocol in a sustainable manner. Either the other miners accept the change, or split in a Hardfork. Something we already know from the debate about the Block Size in Bitcoin is Cash, which has ultimately led to a Split Bitcoin Satoshi Vision.However, there is still another Problem. By increasing the Gas Limits, and hence, more transactions per Block on the Ethereum Blockchain, increasing the size of the Ethereum Blockchain faster. This leads to a higher burden for Nodes and miners, the need to invest more money in Hardware to the network to participate. Due to the increased barriers to entry, could fall the decentralisation and the network to be centralized.Add to that the increase in the Gas Limits has seemingly brought something. The Ethereum Blockchain seems to be full again. Thus, no real solution to the Problem was found, but only minimally in the future shifted with enormous cuts in the decentralization.
Ethereum has hard times ahead
The entire construct can be placed on this point in question. Because every action on the Ethereum Blockchain is running through a Smart Contract, which basically is nothing more than a piece of Code running on the EVM (Ethereum Virtual Machine) and in the individual execution steps to be divided.In the case of a transaction of ETH from point A to point B as a Smart Contract is used, of the 21,000 execution steps, and thus, 21.000 Gas consumed. Here is the question, whether it is Fallen with the underlying complexity, even for the most primitive Operation on this Blockchain, a ensures. Because complexity always increases risk, and makes it all the more difficult things to understand. We see clearly in Bitcoin, a transaction can take place very easily and efficiently.Regardless of all the criticism of Ethereum, the project is one of the largest in the entire Crypto Space. In addition, Ethereum has already noticed for a long time that it comes to its limits and, therefore, to explore possible solutions. Whether the Transition from Proof-of-Work (PoW) Proof to-of-Stake (PoS) beginning in 2020, a sustainable solution will be, remains to be seen. Ethereum is a heavy task and great expectations. It remains, therefore, to the future of Ethereum continues to be exciting. We will keep you up to date.
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