Ethereum Creator Says The Cryptocurrency Can Reach 1 Million Transactions Per Second

By Adrian Cruce

Ethereum creator, Vitalik Buterin, recently talked in a OmiseGO AMA session and said the network is going to be able to process up to 1 million transactions each second, then moving on to 100 million per second, thanks to innovative second-layer solutions like Plasma and Sharding.

One of the most important things always emphasized at presentations and conferences in the past by Buterin was that the blockchain protocol in Ethereum, together with decentralized blockchain networks, struggle with various scalability issues.

During September 2017, Bitcoin and Ethereum were processing 3 to 6 transactions each second when faced with peak capacity. In order for the associated blockchain to be able to support larger scale networks like stock markets or Visa, hundreds of thousands of transactions have to be processed every second.

Vitalik Buterin declared:

“Bitcoin is currently processing a bit less than three transactions per second and if it goes close to four, it is already at peak capacity. Ethereum has been doing five per second and if it goes above 6, then it is also at peak capacity. On the other hand, Uber on average does 12 rides per second, PayPal several hundred, Visa several thousand, major stock exchanges tens of thousands, and in IoT, you’re talking hundreds of thousands per second.”

Buterin went on to say that the use of second-layer scaling solutions are now tested on Ethereum and they can enable the cryptocurrency’s blockchain to support much larger scale decentralized applications. Blockchain network specific splits through Sharding equips splits with nodes groups that process specific shard information. If sharding is enabled, it is no longer necessary to have all blockchain nodes process every blockchain data pieces. This drastically optimizes information settling.

Joseph Poon, Lightning Network co-author, and Buterin have developed Plasma, a solution that is similar to the Lightning Network. It is capable of enabling Ethereum to quickly process micropayments. This is done by creating new child blockchain networks inside the main chains that can quickly process information. They also leverage security as the network becomes less vulnerable to attacks.

Buterin mentioned:

“The reason I think layer 1 and layer 2 networks are complementary is because ultimately, if you look at the math, the scalability gains from the layer 1 improvements and layer 2 improvements do ultimately multiply with each other. If you have a Sharding solution, the Sharding solution itself might increase the scalability of Ethereum by a factor of 100, or eventually even more. But then, if you do Plasma on top of the scalability solution, then what that means is, you’re not just doing 100 times of the amount of activity but you are doing 11 times the amount of entrances, the amount of exists, and despite resolutions.

The Ethereum founder declared that layer 1 and layer 2 synergy solutions increase cryptocurrency scalability by up to 10 thousand times. This is what allows the network to actually process millions of transactions every single second, all while supporting most possible applications.