It’s been an ongoing bear market for cryptocurrencies in 2018, including for the top two coins: Bitcoin and Ethereum. The main causes of bear sentiment seem to be worldwide regulation issues and other concerns around legitimisation (for example the blanket ban on crypto ads by Facebook, Google and Twitter). But another factor is the continuing uncertainty over the technical foundation of the main cryptocurrency platforms. In particular: can they scale as development platforms? This issue is especially important for Ethereum, because its grand plan to be a “world computer” relies on its DApp platform successfully scaling. Which, so far, it has conspicuously failed to do.
Even Ethereum’s creator and most influential spokesperson, Vitalik Buterin, has now expressed frustration over Ethereum’s scalability problems. “If you want to build a decentralized Uber and Lyft on top of an unscalable ethereum, you are screwed,” he told attendees of a Seoul conference this week.
Of course, Buterin also talked about potential solutions – notably “sharding.” As discussed in a previous Blocksplain post, sharding is when a large database (such as the Ethereum blockchain) is separated into smaller chunks called “shards.” The word shard itself means “a small part of a whole.”
Sharding is explained in great depth elsewhere, but many people are becoming impatient with all the dense technical talk and fancy mathematical formulas. We get enough of that in ICO white papers, usually with no product evidence, and it’s made many of us skeptical.
Ultimately, those of you who want to build blockchain products or use them in your business just want to know two things about Ethereum’s scaling solution:
- Does it work?
- When can I use it?
If there’s one key learning so far from the thirty or so posts I’ve done on Blocksplain, it’s that there is a lot of TALK in the blockchain ecosystem – and not much WALK. I can only blocksplain white papers for so long; I’d much prefer to be blocksplaining actual products.
It’s frustrating, because we can all see the benefits and potential in building decentralized apps. But there aren’t any truly scalable DApps right now, outside of crypto-related things like exchanges and wallets.
Vitalik Buterin himself has acknowledged that Ethereum is still mostly pie in the sky. In an interesting Twitter exchange at the end of December, Buterin pondered whether it was possible to have a database solution that delivered the following four things:
1. Secure
2. High throughput
3. Easy to use
4. Environmentally friendly@matthew_d_green you might want to take a go— Barry Leybovich (@BarryLeybovich) December 25, 2017
In response, Buterin firstly noted that “Centralized servers satisfy 2, 3 and 4.” Which is exactly what an anti-blockchain crusader like David Gerard would say. But then Buterin added:
Well I personally believe that ethereum + casper + sharding can do all 4, but I guess that doesn't exist yet 🙂
— vitalik.eth (@VitalikButerin) December 25, 2017
Casper is Ethereum’s proof-of-stake solution for blockchain consensus. Like Ethereum sharding, it’s also in development (i.e. it “doesn’t exist yet”). The idea is that Casper will enable Ethereum to tick off “Environmentally friendly” in the above list, since proof-of-stake doesn’t waste electricity like the proof-of-work system conceived by Satoshi Nakamoto.
But again, Casper isn’t something entrepreneurs and businesses can use right now. It’s still in the hands of Ethereum wonks and their test nets.
The other implication of Buterin’s “I personally believe” tweet is that sharding, if successfully deployed, will enable high throughput (meaning it’ll be fast) and make Ethereum’s blockchain easy to use.
I want to believe. More to the point, I want to explore and write about all the great products that will hopefully be built using a Casper-based and sharding-enhanced Ethereum.
But Web 3.0 ain’t here yet, folks. We’re still in the infrastructure era of blockchain, so we’ll just have to wait for Vitalik and co to (ahem) demystify and go-live with the solutions.