According to Buterin, most major Ethereum network problems belong to the following categories: scalability, security, smart contracts, a consensus protocol, and confidentiality. Several network upgrades including the new Byzantium fork has provided solutions in four main areas. But, as Buterin has noted during the interview with South Korean media edition Joong Ang, it can take 2-5 years for a real solution to the scalability in the Ethereum network.
“I would say two to five, with early prototypes in one year. The various scaling solutions, including sharding, plasma and various state channel systems such as Raiden and Perun, are already quite well thought out, and development has already started. Raiden is the earliest one, and its developer preview release is out already,” said Buterin.
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Development plan
As for scalability, Ethereum Foundation and developers community has made significant progress in open-source with the upcoming launch of the Casper test network and Plasma implementation to scale the second level solution designed by Buterin and Bitcoins Lightning Co-author Joseph Poon. Scalability is only achieved when a user does not have to verify every single transaction that is sent to the system.
Casper is a long-term scaling solution that uses a hybrid proof-of-work (PoW) and proof-of-stake (PoS) protocol in the Ethereum network. Currently, as Bitcoin, Ethereum network is based solely on the PoW consensus protocol to support the system and to verify transactions.
According to Christian Reitwiesner, the team head of Ethereum Solidity and Ethereum C ++ implementation solutions as PoS need to eliminate the workload of users, nodes and, dependence on the miners.
He wrote: “Scalability does not come from the fact that Blockchain is relieved from its load by creating a big number of smaller chains and moving the transactions there. Scalability is only achieved when a user does not have to verify every single transaction that is sent to the system.”
Structural Ethereum is different from Bitcoin because it works as a platform for decentralized applications (dapps). Therefore, Ethereum is in urgent need of a scalable network that can handle dapps with millions of users through PoS solutions such as Plasma.
To improve security measures of Ethereum network, the developers have integrated Zcash for the implementation of zk-SNARKs to allow anonymous and private transactions potentially.
Ethereum long-term price trend
JP Vergne, Ivey business school professor, noted in the study that the developer activity is the most accurate predictor of the price of the cryptocurrency. Vergne said: "We found that the best predictor of a cryptocurrency exchange rate is the amount of developers activity around it.”
Ethereum is the only public Blockchain network and the cryptocurrency in the market close to Bitcoin, regarding developers activity and, therefore, is subject to implementation of innovative solutions such as Casper, Plasma, sharding and zk-SNARKs, the price of Ethereum will likely grow through 2018.
Sharding concept will allow each node to store only part of the full network, while the nodes will be able to check the network through the basic mathematics and communication.
Mike Novogratz, the legend of hedge funds, billionaire, stated that he believes the price of ETH will increase three times by the end of 2018.
Ethereum is ready for more market growth in the coming months with the increase in the transactions volume, growing transaction speed and rise of scale use of technology.
