Sharding Technology: Scaling Solution for Ethereum
It is well known that the Ethereum (ETH) blockchain presently can complete at the most 25 transactions per second. All the nodes present on the Ethereum network currently contribute to the consensus system that leads to completion of one transaction. This mechanism makes the process very intensive and non-scalable which means increased time to confirm one transaction. Increase in the number of nodes is inversely proportional to the scalability of the blockchain. This is a serious issue that is being resolved by the developers of Ethereum.
VitalikButerin’s explanation of sharding on Twitter ran like this, “Imagine that Ethereum has been split into thousands of islands. Each island can do its own thing. Each of the islands has its own unique features and everyone belonging on that island i.e., the accounts, can interact with each other and they can freely indulge in all its features. If they want to contact other islands, they will have to use some sort of protocol.”
The developers are currently working on implementing sharding technology into the system. Sharding technology will basically split the network into smaller parts (shards) and each of them will contain a section of the transaction data. By implementing sharding technology, the Ethereum community plans to break down the number of nodes into sections such that the total number of nodes present in the network do not need to give consensus to confirm one transaction. This will hopefully solve the scaling issues as well as increase the number of transactions completed per second. In case a specific node needs data that is not stored in its own block, it will be able to communicate with other nodes to find the information. This process can also be referred as cross-shard communication. Sharding technology is also expected to reduce the overall node size drastically.
The Proof of Work mechanism that is currently utilized by the Ethereum network has a 51% risk factor without the sharding technique. Therefore, it is essential to use the Power of stake mechanism based blockchain to make the best out of sharding technology. The combination will create obstacles in the path of the potential in deciding which shard to choose. This will have an immediate effect on the security risk that a PoW mechanism inherently has.
Commission Free Ethereum Trading with Robinhood
Robinhood had entered the cryptocurrency zone this January and is rapidly gaining popularity as a brokerage service. Robinhood has recently announced in the second quarter of 2018 that they will also offer their services in Michigan. The more welcoming news is that Robinhood will not take any commission for Bitcoin and Ethereum trading. However, the commission-free trading is currently limited to the residents of Michigan, California, Missouri, Massachusetts, and Montana.
As has been observed in the second half of 2017, the price of most of the cryptocurrencies had experienced a surge. However, the first quarter of 2018 has largely seen a bearish trend. Ethereum and some major cryptocurrencies have been “steadily” gaining their feet back since April. However, at the moment the market price of Ethereum (ETH) continues to show volatility. At the time of writing, according to coinmarketcap.com, the price of Ethereum (ETH) shows $690.06 USD approximately. The market cap shows nearly $68,638,726,920 USD. (As of 16th May 2018) The commission-free trading of ETH announcement by Robinhood is most likely to increase the trade volume. Currently, the app allows the users to only use Bitcoin and Ether for buying and selling.
CryptoFacilities Launches ETH Futures
The accommodating Ethereum network has made many investors pick up the ETH digital asset. CryptoFacilities, based in the UK, launched ETH futures on 11th May 2018. Prior to this, the British start-up had launched Bitcoin and Ripple futures. Till now, only ETH derivatives were popular and are available on NASDAQ Nordic. It is expected that CryptoFacilities will pave the way for a greater adoption of ETH futures. According to the CEO and founder of CryptoFacilities, TimoSchlaefer, Ethereum will see new developments with this launch.
“The Ether Reference Rate and Real-Time Index are designed to meet the evolving needs of this marketplace. Providing price transparency and a credible price reference source is a key development for users of Ethereum.”
CME’s Tim McCourt
Followed by the launch of Ethereum Futures, Chicago Mercantile Exchange & Chicago Board of Trade (CME Group Inc) partnered up with CryptoFacilities to list the price of Ether in real-time dollars. Bitstamp and Kraken will help in determining the CME CF reference rate. According to Tim McCourt, “The Ether Reference Rate and Real-Time Index are designed to meet the evolving needs of this marketplace.” This will surely up the competition between Bitcoin and Ethereum and also bring in many new things into the Ethereum network.
For the latest cryptocurrency news, join our Telegram!
Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
Image courtesy of Pexels
The post Ethereum (ETH) Scaling Solution and Some Recent Updates appeared first on Global Coin Report.
Globalcoinreport.com/ is author of this content, TheBitcoinNews.com is is not responsible for the content of external sites.
Our Social Networks: Facebook Instagram Pinterest Reddit Telegram Twitter Youtube