Ethereum scaling roadmap casper, plasma, sharding

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While the Ethereum roadmap isn’t definitively laid out, there are many important updates planned to take place in 2019. We can also expect to see more of the research that has taken place over the past two to three years begin to enter preliminary testing phases and eventual implementation on mainnet. Without further ado, here’s what you should know about Ethereum’s development efforts in 2019 and beyond.

How Will Ethereum Scale?

Ethereum has already accomplished a lot as a blockchain protocol since its initial project development began in 2014. With thousands of decentralized applications (dApps) built on top of Ethereum, it’s the clear leader of ecosystem creation amongst blockchain projects. However, a number of newer blockchain projects are beginning to challenge this. EOS, POA, and Steem are all excellent examples of blockchains that also have a number of native applications.

In early 2019, there are a number of challenges that remain unresolved for Ethereum. The primary focal point of Ethereum in the immediate future is clearly on improving Ethereum’s scalability. 

Ethereum transactions scaling
When Ethereum transactions increase, the network slows down and fees increase. A scaling solution is needed.

Making an exact timeline for when we should expect to see these solutions implemented can be difficult. Nonetheless, it’s good to use estimated time frames based on various sources to show how close (or distant) Ethereum’s upgrades are.

The Ethereum Roadmap at a Glance

UpgradeDateDetails
Raiden Red EyesDecember 2018Off-chain solution for faster and cheaper transactions.
Constantinople hard forkJanuary 16th, 2019Lays the technical groundwork for significant scaling projects in the future.
PlasmaTBDThe introduction of “child” chains off the main Ethereum blockchain for faster and cheaper transactions. Similar to how the Lightning Network works on Bitcoin.
Caspermid-2019Ethereum’s main scaling goal. Casper is the shift from Proof-of-Work to the more efficient Proof-of-Stake.
Sharding2020-2021Partition the existing blockchain into smaller pieces known as shards.
Serenity (aka Ethereum 2.0)2019-2021The culmination of Casper and Sharding will create “Ethereum 2.0.”
Ethereum 3.02022-2025Implementation of a ‘super quadratic sharding’ solution which could facilitate one billion transactions per day.

Before we look at the roadmap in more detail, let’s also give some context to where the project is today.

Ethereum 1.0 (July 30, 2015 to Present)

Classifying the various Ethereum versions can be tricky. This is because the project isn’t the same as it was during its mainnet launch in July 2015. Plus, there are two commonly-accepted classifications. 

First, you’ll find that the Ethereum blockchain in early 2019 is still referred to as ‘Ethereum 1.0’. Ethereum 2.0 is referred to as Serenity. The official Ethereum Wiki page shows that Serenity is technically classified as Ethereum v4, and its release date is to be determined. 

Some major development milestones of Ethereum 1.0 include:

Olympic (v0, released in May 2015)

Frontier (v1, released in July 2015)

Homestead (v2, released in March 2016)

Metropolis (v3 aka vByzantium released in October 2017). 

Metropolis (v3.5 aka vConstantinople) will be released in January 2019. 

Raiden’s Red Eyes Launched on Ethereum Mainnet (December 21, 2018)

Although this technically happened in 2018, it’s still an important and recent achievement on the roadmap to reaching greater scalability for Ethereum. In sum, the Red Eyes protocol allows for quicker transaction completion times through payment channel technology, which takes place off-chain. 

Some innovative features of Red Eyes include single and multi-hop transfers, REST API with endpoints for all functionalities, rewritten and more gas-efficient smart contracts (e.g. only one contract per token network), recoverability in case of an irregular shutdown of the Raiden node, and the integration of the Matrix transport protocol for messaging. 

raiden network
The Raiden network

Still, the current version of Red Eyes has a few known issues to be aware of. For example, third parties are currently unable to monitor channels on behalf of nodes or to pathfinding services. It also isn’t possible to do atomic swaps or upgrade smart contracts with Red Eyes. 

The only way to upgrade the network is to close all channels and redeploy a new smart contract and reopen the channels. Additionally, Raiden’s blog post mentions numerous security notes. Some known issues include a compromised user system, a full disk, blockchain congestion, and chain reorganizations. 

Once fully deployed, Raiden is designed to enable the Ethereum blockchain to process one million transactions per second and make transactions significantly cheaper to complete than before. 

Three 1,000 ETH Grants (December 2018)

In December 2018, Vitalik Buterin sent 1,000 ETH grants to three different blockchain companies: Prysmatic Labs, Sigma Prime, and ChainSafe Systems. Even though this was positive news, it actually led to mixed reactions from members of the blockchain community. 

For example, one VC investor stated that Ethereum is “missing ship dates [and] are lacking basic operational leadership.” A CEO of a crypto project said, “Ethereum has taken its lead for granted for too long (2 years). Needs increased focus and urgency on scalability to reclaim its narrative. Move fast or die slow.”

Whether or not you agree with these criticisms, it’s safe to say that most of Ethereum’s innovations are still listed on the future roadmap, and a lot of work is needed to sustain its position as a leader in blockchain and crypto. With that being said, here are some future events to look forward to.

Metropolis, vConstantinople (January 16, 2019)

Constantinople is the first major Ethereum update of 2019 and quite possibly the most important since the October 2017 update. Constantinople marks a hard fork of the Ethereum blockchain. After this update is released, members of the community will have to decide whether to run the old network or switch to the new one. 

Lane Rettig, an independent developer, has called Constantinople a “maintenance and optimization upgrade.” While these changes aren’t all that big from an end user’s perspective, they do present new opportunities as well as challenges overall in several key areas. For example, upgrades implemented with Constantinople should make it easier for the Ethereum team and projects building on top of Ethereum to continue on tackling scalability issues in the future.

Constantinople will include the following five EIPs (Ethereum improvement proposals): 

EIP 145 introduces a more efficient method of information processing known as Bitwise shifting. According to the EIP145 proposal notes, it costs around 35 gas to do a shift using arithmetic. However, this solution introduces an Ethereum Virtual Machine (EVM) native operation that only costs 3 gas. This results in a 91.4% savings in gas costs. 

EIP 1052 provides a solution for optimizing large-scale code execution on Ethereum. More specifically, this functionality returns the keccak256 hash of a contract’s bytecode. It improves upon the design of the EXTCODECOPY opcode. As a result, large contracts that only require the hash will be cheaper to process.

EIP 1283 is based on EIP 1087. This proposal aims to help smart contract developers by reducing gas costs related to changes made to data storage.

EIP 1014 is utilized in state-channel use cases that involve counterfactual interactions with contracts. It allows interactions to (actually or counterfactually in channels) be made with addresses that do not exist yet on-chain.

EIP 1234 is the somewhat controversial proposal that reduces the block mining reward issuance from 3 ETH down to 2 ETH. This will change Ethereum’s underlying economic policy.  It also delays the introduction of the “difficulty bomb” for 12 additional months. The difficulty bomb is a piece of code which will eventually increase the difficulty level of puzzles in the mining algorithm used to reward miners with ETH.

Plasma and Plasma Cash (TBD)

Even though it’s up for debate, most consider Plasma to be an on-chain scaling solution. This is due to the fact that Plasma relies upon the inherent security of the Ethereum blockchain. 

Plasma chains have the ability to be better than ordinary sidechains due to increased security and easier accessibility. For example, if a Plasma sidechain breaks, funds are still secure thanks to the main chain. Meanwhile, users can also withdraw funds from a Plasma sidechain to the main chain at any time with balances from the last valid block. 

Ethereum plasma diagram

Back in September 2018, OmiseGo Director of Engineering Kasima Tharnpipitchai outlined updates about providing a Plasma solution for Ethereum at a meetup event in Warsaw. On October 8, 2018, the OmiseGo team released the fifth Plasma update. Although Plasma hasn’t been added on top of the Ethereum mainnet, there has been a lot of progress towards this goal. For example, the Plasma team arrived at Devcon4 with an internal testnet, a Plasma MVP, and the first dapp built on OmiseGO. 

Plasma Cash is another solution that’s supposed to be even more efficient than Plasma. However, this is still in the research phase as of the beginning of 2019. The OMG team has been working with other researchers to simplify an atomic swap protocol which utilizes Vitalik Buterin’s atomic swaps and defragmentation work. 

Loom Network is another blockchain project that has been working on developing similar Plasma solutions to improve the scalability of the Ethereum blockchain.

Casper (mid-2019)

Casper is Ethereum’s pure Proof of Stake consensus algorithm. Why the change to Casper? Simply put, Proof of Stake blockchains are typically more scalable than Proof of Work blockchains. Additionally, there are growing concerns over the environmental impact of cryptocurrency mining operations. 

As of the beginning of 2019, transactions on the Ethereum blockchain are still reliant upon Proof of Work. This means that cryptocurrency miners play a big role in verifying the accuracy of transactions. When Ethereum switches to Casper, transactions will be validated with staking. 

Originally, the core development team decided to come up with two phases of Casper (FFG and CBC). FFG was supposed to be a hybrid PoW/PoS solution. Meanwhile, Casper CBC was designed to be a pure PoS. In 2018, however, the Ethereum team scrapped this two-phase Casper approach and decided to focus solely on Casper CBC. Here is an excellent article (with diagrams) that demonstrates how Casper CBC should work.

proof of stake vs proof of work
Source: Block Geeks

Sharding Updates (2020 and 2021)

In basic terms, sharding aims to securely partition the existing blockchain into smaller pieces known as shards. This solution, like most others on this list, is something that many non-Ethereum blockchain developers and researchers are also working on. 

When it comes to implementing sharding on a mainnet, Ethereum won’t be the first. This title will likely go to Zilliqa upon the release of its mainnet on January 31, 2019. However, Ethereum’s sharding implementation isn’t too far down the road. According to various estimations from developers, we should expect the Ethereum blockchain to implement phase one of sharding sometime in 2020 and phase two sometime in 2021. 

Serenity a.k.a. Ethereum 2.0 (2019/2020)

Earlier, we mentioned that Ethereum is still in version 1.0 as of the beginning of 2019. So when will Ethereum 2.0 be released? This is still difficult to say exactly. That’s because Ethereum 2.0 is generally considered to be a combination of Casper CBC (full PoS) and sharding. As stated above, Casper will likely be ready mid-2019. 

Meanwhile, sharding for Ethereum won’t be initially implemented until 2020. In that sense, it’s easier to think of the move to Ethereum 2.0 as the culmination of two separate upgrades and not something that will have a single release date.

Ethereum 3.0 (2022 to 2025)

While Serenity (Ethereum 2.0) is still on the horizon, the core Ethereum team is already working towards Ethereum 3.0. This mostly involves research, rather than implementation. As to be expected, objectives that are further along in the roadmap have broader time frame ranges. 

This is because delays or even circumstances that speed up the current projects or the future development of Ethereum 3.0 could take place.

Super quadratic sharding is a major part of Ethereum 3.0. As this site explains it, “So say, Ethereum currently has 16,000 nodes and all of them are currently processing the same transactions. You split that into 160 node groups of 1,000 nodes each. Ethereum’s current capacity is around one million transactions, so in this sharded chain its capacity would be one million x 160.”

Once everyone is confident in the capabilities of the sharded chain, it’s possible that, sometime between 2022 to 2025, Ethereum can split those 1,000 nodes each into 10 groups of 100 nodes each. This would make it possible to process one billion transactions per day with Ethereum. 

Conclusion

Ethereum continues to make progress on its roadmap goals for 2019 and beyond. Much like any project, there will likely be a few speed bumps along the way. However, a large group of core developers and an ecosystem of independent developers and projects building infrastructure for Ethereum is what continues to accelerate innovation.

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ethereum classic

Mining pool, Etherchain, has reported that Ethereum Classic (ETC) has succumbed to a successful 51% attack “with multiple 100+ block reorganization.”

A 51% attack occurs when a malicious actor commands more than half the hashing power on a blockchain. It allows the attackers to “double spend” a cryptocurrency, hence why it’s often known as a “double spend attack.”

“Block reorganization” as mentioned in Etherchain’s tweet, refers to a blockchain which excludes blocks that were initially thought to be part of the longest chain. This is consistent with a double spend attack.

Rumors of a 51% on the ETC blockchain emerged early on January 7th. The Ethereum Classic Twitter account initially dismissed the rumors. However, they have since recognized the attack and advised all exchanges and mining pools to increase confirmation times. 

Ethereum Classic forked from Ethereum after the community’s controversial decision to reverse a hack in 2016.

Block Explorer will update this article as we learn more.

Further reading: What is a 51% Attack?

Ledger nano x bitcoin hardware wallet

Ledger, the world’s most popular crypto hardware wallet provider, has unveiled its next-generation product: Nano X.

The Nano X is an upgrade from the Nano S which sold over a million devices and featured in our best cryptocurrency wallets of 2018 roundup. The Nano X offers a host of new, improved features for safe bitcoin storage.

Here’s everything we know so far.

Ledger Nano X: Bluetooth Enabled

Ledger’s new hardware wallet will feature Bluetooth connectivity, allowing users to connect to a mobile device. The previous Nano S only connected to a laptop or desktop via USB.

It improves usability in a mobile-first world and it means the Nano X can be used on the go.

Ledger Live Mobile: A New Mobile App

Ledger will launch a mobile app to integrate with the device, Ledger Mobile Live. The app will enable users to make transactions and check their balance quickly.

In the past, Ledger users could only conduct transactions on the desktop software.

The app will be available on Google Play and Apple App Store on January 28th.

Bigger Screen

The Ledger Nano X features a larger screen than its predecessor. That’s a crucial upgrade as most of Ledger’s security features operate right there on the screen (PIN code access and transaction confirmations, for example).

The larger screen makes this process easier and more user-friendly. The buttons have also been moved from the top of the device to the front for a more intuitive experience.

1,100+ Coin Support

Like the previous device, Ledger’s Nano X will support more than 1,100 crypto assets.

However, the big problem with the Nano S is the inability to hold more than about ten cryptocurrencies at once on the device.

The Nano X aims to address that by increasing the memory.

Ledger nano x cryptocurrencies

Increased Memory: 100 Coins At One Time

By increasing the memory on the Ledger Nano X, users can hold significantly more cryptocurrencies at once.

That’s because Ledger stores each different crypto asset on its own wallet, using a separate app. It’s a security feature. If you want to hold bitcoin on a Ledger device, you’re not just storing bitcoin, you’re using memory to store a bitcoin wallet. If you then add ethereum, you also store an ethereum wallet or app.

The Nano X drastically increases the memory, meaning you can hold up to 100 different crypto assets at once.

Security

The introduction of Bluetooth might send alarm bells ringing for some. A wireless connection does increase the risk of an attacker hijacking the connection.

However, Ledger claims it is still highly secure due to Bluetooth’s short range and the device’s built-in security features. Speaking to Bitcoin Magazine, CEO Eric Larchevêque said: 

“The Bluetooth connection is only used to send public data, such as your public key. The transaction itself is encrypted end-to-end while using the highest level of encryption and security on the Bluetooth protocol … no private keys are on the Bluetooth connection. It’s the same as the USB cable. Security-wise, the architecture is the same.”

The private keys are stored in a microchip that remains in the device at all times. Additionally, all the most important security checks (like PIN access) take place on the device or in the app. The device itself will only respond to the corresponding user app which should limit attacker access.

Price?

The Nano X will launch at $119 including shipping. Its predecessor, the Nano S, will get a price cut. 

The Ledger Nano X is available to pre-order now and will ship in March. The app will launch on January 28th. 

Technical Specifications

Size: 72mm x 18.6mm x 11.75mm

Weight: 34g

Compatibility: 64-bit desktop computer (Windows 8+, macOS 10.8+, Linux) or smartphone (iOS 9+ or Android 5+)

Chips: ST33J2M0 (secure) + STM32F042

Battery: 100mAh

Further reading: 12 Best Crypto Wallets (For Safe and Secure Bitcoin Storage)

stocks on the blockchain

From January 9th, investors will be able to buy tokenized shares in leading tech companies. The initiative is powered by Estonian-based cryptocurrency exchange DX.Exchange and Nasdaq. 

Using the DX.Exchange platform, investors can purchase shares in Apple, Tesla, Facebook and others, represented by an ERC-20 token on the Ethereum blockchain.

Stocks on a blockchain: how does it work?

If you want to buy stock in Facebook, you’d purchase the relevant token on the DX.Exchange. The exchange’s partner MPS MarketPlace Securities will then buy the corresponding Facebook stock, and issue an ERC-20 token to you.

As explained in the accompanying press release: 

“Digital stocks are backed 1:1 to real-world stocks traded on conventional stock exchanges. You purchase tokens for leading assets that you choose to invest in, such as Google, Amazon, etc. Therefore, when you are a token holder, you own shares of the company.”

Token holders are also entitled to the same cash dividends as real shareholders.

The trading platform itself will also tap into Nasdaq’s SMART technology, which monitors suspicious trading activity and manipulation.

Why buy tokenized shares?

Firstly, it means you can buy fractions of a share. If you don’t want to buy one whole share of Amazon stock (at $1,500), you could purchase a third of a share via the tokenized platform.

It also means you can buy stocks with bitcoin. Since DX.Exchange is a cryptocurrency exchange, you can simply buy tokenized shares with BTC.

Lastly, you can purchase shares after-hours. Normal stock market trading is restricted to working hours. But with tokenized shares on DX.Exchange, you can buy stocks in the middle of the night.

Speaking to Bloomberg, DX.Exchange CEO Daniel Skowronski said “We saw a huge market opportunity in tokenizing existing securities. We believe that this is the beginning of the traditional market’s merge with blockchain technology. This is going to open a whole new world of trading securities old and new alike.”

Which stocks are available?

The platform will launch with ten leading stocks from the Nasdaq exchange:

  • AlphaBet (Google)
  • Apple
  • Amazon
  • Facebook
  • Microsoft Corporation
  • Tesla
  • Netflix
  • Baidu
  • Intel Corporation
  • Nvidia

More will be added as the platform expands. The tokenized shares will open in Europe on January 9th, and launch in US in mid-late 2019.

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proof of keys

Proof of Keys is a new movement that encourages all crypto users to withdraw their funds from centralized exchanges like Coinbase, Gemini, and others.

Initiated by investor Trace Mayer, the first ever Proof of Keys event will take place on 3rd January 2019 – the anniversary of the bitcoin genesis block – with a view to establishing an annual tradition.

To participate in the Proof of Keys movement, you simply need to withdraw any crypto you hold on an exchange and store it safely in a personal crypto wallet where you control the private keys instead.

Why Does Proof of Keys matter?

There are two main reasons for removing your crypto from exchanges on Proof of Keys day:

  1. To ensure cryptocurrency exchanges actually have the funds they claim. If everyone withdraws their crypto funds on the same day, crypto exchanges will be forced to pay out. If they fail to do so, it’s a huge red flag for exchanges that claim to store your money safely.
  1. To take control of your own crypto. As Andreas Antonopoulos said: not your keys, not your bitcoin. If all your bitcoin is stored on a crypto exchange, you don’t actually own the private keys; the exchange does. That means you’re not in control of your bitcoin or other cryptocurrencies.

Protect Against Hacks and Centralization

If you leave your funds on a cryptocurrency exchange, it’s much more vulnerable to hacks. $1 billion in crypto was stolen in 2018; the vast majority from crypto exchanges.

Exchanges are huge targets for hackers because they store vast amounts of crypto in one place. Instead, move your crypto to a personal wallet where it is much less vulnerable.

As Block Explorer previously reported, at least 25% of all litecoin in circulation is held by Coinbase. That’s a dangerously large amount of litecoin stored in one place. Not only that, but Coinbase technically owns all that litecoin; not you the depositor.

Proof of Keys is a, therefore, a practical and philosophical movement.

How to move your funds off an exchange

To withdraw funds, you’ll first need a wallet and a corresponding address.

The safest option is a hardware wallet from Ledger, Trezor or KeepKey. These are similar to external hard drives designed specifically for crypto storage. Since they’re offline most of the time, they’re difficult to hack (known as “cold storage”).

There are other wallet options that give you full control of your private keys including software desktop wallets and simple paper wallets.

Want more information? 12 best bitcoin wallets for safe and secure crypto storage

Once you have your wallet address, simply withdraw funds from the exchange to the wallet address.

Be aware that there may be high transaction volume on January 3rd which may cause congestion. You should also test the wallet address by sending small amounts of crypto to the wallet first.

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