Blockchains are like dragons.
They provide robust security to tokens backed by assets in the real world. Unfortunately, like dragons guarding gold, although secure, they are also slow, lethargic and difficult to scale.
Bitcoin crawls at 7 transactions per second (tps), and Ethereum does not fair better at 15 tps. To be commercially useful, blockchains need to scale to the region of 60,000 tps, the speed at which Visa processes transactions.
Block-chain security (thousands of computers confirming every transaction) is a double-edged sword, forcing transactions to wait in queue to be confirmed by everyone. This gives them un-hackable security, at the cost of speed.
Enter Plasma — blockchains on blockchains
“We propose a method for decentralized autonomous applications to scale to process not only financial activity, but also construct economic incentives for globally persistent data services, which may produce an alternative to centralized server farms.” -Plasma Whitepaper
Plasma is a set of smart contracts that let you create ‘baby blockchains’ on Ethereum, that have three neat features that make them fast.
- They are localised, need fewer nodes and are thus faster
- They distribute computing tasks through MapReduce (an invention by Google) to handle large scale data processing.
- Baby blockchains can have more baby-blockchains, to further distribute the work-load.
Rather than having to wait for the slow, secure blockchain, an application saves its original state on Ethereum, then jumps to these baby chains to scale quickly. Once processing is complete, or in case of a dispute, the final state is saved back on Ethereum, which guarantees the security of the baby chains.
credit: deviantart
This opens up a plethora of cool things you can do on these baby chains. e.g.
- Run financial applications at billions of transactions per second.
- Create private chains that are guaranteed by a public blockchain
- Use different methods of consensus on the baby chains (Delegated Proof of Stake, Proof of Stake, etc.)
- Run payment channels, sharding, etc. on these chains to make them even faster.
- Create your own, fast blockchain on top of Ethereum (e.g. Bitcoin on Ethereum)
In a nutshell, plasma enables Ethereum to run world wide computations, for billions of users, with trillions of records stored, at billions of transactions per second.
The future looks promising
Already, OmiseGo is implementing plasma for the next generation of financial services. Omisego will enable rapid value exchange between fiat and decentralized currencies and across jurisdictions and organisational silos.
credit: r/omise_go
Ethereum created a platform to tokenise assets, and this opened a large economy for businesses supported by tokenised assets. With plasma, Ethereum has created a platform for anyone to create fast blockchains, that are secured by Ethereum as the root chain.
Thanks very much for this great article! I really liked it.
I thinks it's very informative. That's why I upvoted 100%, followed and resteemed.
it sure is , really cute how its' explained with the dragon :)
Haha wow. 1 million per second? That is really impressive! I like how the short OMG makes you think of "oh my god!". But I also think is it really that important that transactions get cleared fast? Since VISA payments can take weeks to clear so perhaps the slower BTC ain't that bad after all? For me when I transfer Bitcoin I can see it instantly that a transfer has been started. For normal purchases I still believe Bitcoin could work.
But now when we are building a world where we will transfer value all the time to others even in the offline world then we will probably need something like OmiseGO. The guy behind Ether seems like a genius. All this speed is very exciting of course it will then become impossible to tax it. There will be so much sharing that it will be impossible for a government to track it. Rapid value exchange means so if someone wants to make a new project fast and it's a good idea he will automatically have money for it. We will probably even have a Blockchain that could analyze if he has an original idea that will be helpful for the community.
It's very clear that value transfer will be no issue in the future. Since scale doesn't seem to be a problem when there is so many smart people working on it. The more fascinating thing will be to see how many currencies we will be having eventually! Can the world function with over 1000 currencies or will we eventually move down to around the same amount of currencies that we use in Fiat to this day? Maybe it won't matter what token or currency we use? Or the most interesting idea that maybe 1 currency eventually will out-compete all others and be so much superior. But in the digital age wouldn't that be easy to copy as well?
Very curious what the fees will be. Tried to find specifics in the white paper but couldn't find. That is an area which still seems to be a bit shady with many cryptos. Steemit has 0 fees as I understood it but if this will be high volume then it feel like it will have some fees involved. Wonder if it would be possible to completely remove fees in future. I do know Bitcoin needs fees for mining. But is there a way to do it without that?
Next thing would be to connect Plasma to our brain so we could make a transfer just by thinking about it and bam sent! Since having to insert input inside a computer or phone still isn't optimal in terms of effectiveness when transfer value. Elon Musk has also talked about that a bit that a major thing that slows us down is the slow output. But that we have better visual input since we have eyes. What happens when all value transfers goes in Plasma speed that is an interesting question. Will probably be a new world that nobody even can imagine how it will look like.
Very nice writeup. You made me want to watch The Hobbit with all the dragon talk! It was a great analogy and really grabbed my attention haha. The words really just worked great together.. Dragon.. Scale...Gold(blockchain tech!)
I'm very excited for plasma. I've done a little bit of research on scalability while looking for investments since it's pretty obvious big blockchains are going to need scaling solutions! I'm sure you have heard of Raiden Network, but if not they are doing something pretty similar using payment channels. Combining sharding and channels would make for a wicked fast network.
I dig the little chart comparing BTC, PayPal, Visa - Its a great visualization! One million transactions per second would be insane. Just shows how powerful this technology is, that it could blow Visa(probably the most used and adopted payment network in the world) completely out of the water.
The cool thing is, all these technologies work together and can be used on both the parent and child chains.
Sharding, Raiden and Plasma
Vitalik has mentioned that he will be utilizing all of these methods working together to help scale ethereum. It does seem like he is leaning towards not really using Raiden Network though.
In one of his blog posts he talks about how these strategies complement each other and can work together, but also states that he wants to keep the scaling solution "within the ethereum family" and is recruiting people to help create a scaling solution. This is what leads me to believe that he is trying not to use them.
If you wanted to read about it, this is his blog post from early January: https://blog.ethereum.org/2018/01/02/ethereum-scalability-research-development-subsidy-programs/
Now i could really convince my friends and family to look atleast once and for last why my hope is with blockchain they always ignore such thing but this is going to be changing the history and making new one
i am like omg in reaction after seeing this post fantastic post by you this is really amazing to see what we are about to witness in the coming time
Interesting read! Are you saying that DPOS baby chains can be built on top of Bitcoin to help increase tps to 60,000 tps? If so, is anyone working on this? Thanks for the post!
On top of Ethereum, yes! To increase tps way beyond 60,000 tps. OmiseGo is using plasma with POS and should be demoing their product soon
I know they are working on a lightning network, however, I'm not sure if they will be using the same tech/strategy
Lightning is a simple channel. Plasma is a contract that enables immense scale, and can use channels on top of parallelization
I really liked this article. Creative and informative. I look at a lot of articles and this stands out. Upvoted and followed.
Great article! The simile is really good!
Correct me if I'm wrong, because I'm still pretty new in this ecosystem. If cryptocurrency will be accepted as method of payment (in supermarket, for example) this Plasma and baby-chain will be the hinge point for payments in future?
OmiseGo is creating a solution for precisely this
Will be very interesting to see how long time before something like this will show up in a supermarket. Doesn't seem to be that far off since we already can buy a Bitcoin credit card. Obviously it would be best if it's just a phone app that is needed instead of a bulky machine to install inside a food store. And then use NFC payments. But soon probably even food stores will be obsolete and we will probably just order food all online to be arrived at our home with a robot(Maybe even a drone that lands on our roof!). Eventually we will have food delivered in pipes just like water. Maybe just the ingredients in raw form and then an AI robot that prepares it for us. Pay with plasma in your home.
Ideal would be that these baby Blockchain dragons predicts your purchase before you even buy something. I think Amazon is already doing that by analyze peoples buying trends. With machine learning this will speed up even further. Or even better the supermarket exist in the Blockchain world online and you could pay on the Internet. Maybe even earn special tokens if you buy certain things or engage in their social media activities. Right now the Internet is a screen we look into but the Internet will probably be deeper ingrained in our bodies eventually so we won't think about it. We will just always be on. Which we kind of are already!
There are many other interesting passionate teams working on cool stuff when it comes to fast payments for example Electra (ECA). These will mainly now focus on E-commerce integration 2018 and create wallets for Android and iOS but since they will be using QR codes it won't be that difficult for food stores to eventually implement this. But then food stores have to become a bit more digital faster. But I think a transition from old payment system to a new modern and faster may happen very fast. Since VISA and Mastercard payments may be a bit slow and not the safest since you have no idea if the pay machine is safe. Think it will be much better to pay with your smartphone where you can confirm with Facial ID or Fingerprint sensor.
A bit how their system works. This is from their whitepaper that could be found on their website. Looks like a passionate team behind it! I find the competition between all the coins and tokens will be fascinating to see. Since all the teams seems highly passionate about what they are doing and many truly believe they are changing the world by creating new better and faster systems that will makes peoples life much easier when it comes to value transfer technologies!
hi @hitwil I am very happy to see your blog even though I was a kid, I can learn through the post that you publish always make the readers become interested ahahahaha
hi @hitwil I am very happy to see your blog even though I was a kid, I can learn through the post that you publish always make the readers become interested ahahahaha
very informative. This just goes to show how far blockchain tech has come since early 2009. OMG and countless other tokens are going to see a huge rise in value due to the implementation of Plasma
Yes, it is really impressive how far this tech has grown in such a short time. Thank you very much @hitwill for such an informative and simplified explanation. For me, the most exciting part was understanding the 'baby dragons' analogy, and how they can play well with other technologies. We really are coming of age, getting there!
This is exciting Hitwill, and exactly what Ethereum needs. I’ve been monitoring OMG and it has really been gaining value in the market, which means people really believe they can deliver and have solid technology.
I hold a good amount of ETH and like the Lightening Network will do for BTC, I hope Plasma can deliver for ETH.
Love the analogies as well, Ethereum is just a big Smaug! It’ll never catch Bilbo. Haha.
Great post, thanks for sharing.
Yes, it's pretty exciting. Plasma should be able to do more than Raiden/ Lightening, especially since channels can also be run on top of plasma, making it even more scaleable.
What do you think of platforms like Lisk and Achain?
Interesting article. Thank you very much for the information. I especially liked the comparison of blockchains with dragons. That's why I upvoted, followed and resteemed
really super & mind touch post and pic like it.
I like your all content because of your content type and quality are so good.
I get a lot of information from them and get knowledge which I can use in future. keep it up.
After reading that post and in the end gif made me feel confident that the future is bright and the adoption of blockchain which is happening around opens new doors of opportunities
Thank You for this usefull information about bitcoin You are an expert. I like the comparison that Blockchain with Little dragon, slow but powerfull
Thank you VERY much for sharing this great information! Speed and security! I absolutely love it! Thank you VERY much for putting all the time and effort into a PHENOMENAL post like this! Plasma and this post is VERY cool! I'm proudly following, commenting, upvoting and resteeming! I have so much to learn and I know that it pays to follow @hitwill :)
Thank you! What other things would you like to write about?
My pleasure! I would really appreciate, if you could educate me regarding Smart Media Tokens! Thanks Again! Your Devoted Friend @extraterrestrial :)
Maybe some kind of comparison between similar platforms?
I assume the performance issue for bitcoin is rather known already. What I don't know at this moment is which platforms are trying to solve this, which get some traction and which have a technological edge...
Might be a difficult task though ...
Representations are so cute. Hahaha
This sounds so promising! Though I don't have a lot of ideas about this thing, but your post is so informative. This just give me an idea on how it works. Thanks. Upvoted!!
Steem already has great tps and it's very scalable, other cryptos have a lot of catching up to do. I'm looking forward to these "baby chains", billions of transactions per second sound amazing!
Steem and EOS are fantastic products, that are easy to code for and scale very well. Plasma enables massive scaling, without sacrificing decentralisation (which EOS and STEEM sacrifice through minimum hardware requirements and DPOS)
Scaling is what's holding back cryptos, in my opinion. For example, 7 transactions per second is waaaay too low for bitcoin, since it's the most popular crypto. Plasma will be a game changer!
Bitcoin is currently struggling with transaction speed and cost. It's encouraging to see all these solutions that blockchains are coming up with.
This is really something new i came to knew about interesting and seems like a must now as the scalability is a more sort of a issue now
i might have gotten something wrong here but was plasma not supposed to be like gas is for neo?
something you would get for passively holding a coin (i can't remember what coin it was) I might be wrong.
Nah - Plasma is code that lets you create blockchains on Ethereum. In this blockchain, you can create any rules you wish, including having your own currency that can be staked. E.g. OMG
ahh i was wrong then.
thank you so much for clearing that up. that will be interesting to keep an eye on for sure :)
thank you for correcting my mistake.
NEO will award GAS for holding it
I found your blog today. Your content is great.
Thank you sharing. This post was useful in giving us a big-picture idea of why scalability matters in blockchain, and how it might be solved.
Good Luck
Its a good sharing. Thanks for post @hitwill
I am excited to learn more about Eth now. Thanks for sharing!
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thank you for the information, this article is very useful for us all.
may God bless us...
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My brain is still faster!
Thanks to this very useful imformation. greetings from me..
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this is far most one of the cleanest and simple explanation , with a beautiful layout and then the cute little dragon's ,
you would be a good teacher for explaining blockchain and crypto at children , you would have there full attention , at least you had everyone listening :p