Ethereum Can’t be Global Settlement Layer Without Solving Scalability Trilemma
Ethereum’s aim to be the main global settlement layer could only be a reality when the network has addressed its scalability trilemma, the CEO of IOST blockchain has surmised.
“Before a public blockchain network can truly cement its future as the global settlement layer, it needs to solve the scalability trilemma i.e overcome the hurdle of achieving true scalability, security, and decentralization simultaneously,” Jimmy Zhong notes via email.
Zhong’s comment is in response to the path towards Ethereum 2.0 – as laid out by the founder of ConsenSys, Joe Lubin, in his Deconomy conference talk – and why Ethereum remains the only viable candidate to be a global settlement layer for a decentralized world economy.
Held at the Jangchung Arena in the first week of April, the gathering which also had the likes of Vitalik Buterin, Andreas Antonopolous and Changpeng ‘CZ’ Zhao on ground, presented Lubin the opportunity to make his case for why Ethereum is the optimal choice to be a global settlement layer now after picking out the odds in other platforms including EOS, Polkadot, IBM’s Fabric and Cosmos. Lubin also touched on Ethereum’s scalability issue:
“Ethereum is innovating fast with respect to scalability at both layer two and layer one. And layer one is the only current candidate to be a base settlement layer for the planet because it favors availability and liveness over consistency, bolstered by relatively fast finality, and the project is the most rigorous of any out there about being maximally decentralised.”
He adds that as the world gets tokenised, established financial houses and traders will seek to manipulate markets for their interests hence the need for “a maximally decentralized base as the foundational settlement layer of the global economy.”
However, Zhong differs. With another side to the view hinging on his belief that platforms like IOST are well positioned for a truly successful start based on architecture. He stated:
“First generation blockchains like Ethereum promise decentralization, but that comes at the cost of scalability, as it currently can only handle 14 transactions per second. Second generation blockchains have come along since to offer higher throughput, but they do so at the expense of security and decentralization, with groups of super nodes controlling the network.
He also touts the platform’s technology and its network of reported 200 partners and developers in the ecosystem as factors that place IOST as “a front running candidate to becoming the global settlement layer for the decentralized world.”
“IOST’s blockchain addresses the scalability trilemma through its unique Proof-of-Believability Consensus Mechanism (PoB), combining the decentralized benefits of Proof-of-Work (PoW) and Proof-of-Stake (PoS) systems, where hundreds, if not thousands of nodes can participate in block production and securing of the network. By algorithmically selecting a set number of validators for each round of block production ensuring node rotation, decentralization and security, the process allows for a higher throughput of up to 8,000 transactions per second, addressing both scalability and centralization issues of other protocols. Our first layer utilizes a pledge-plus-vote-model to limit the risk of Sybil attacks, ensuring higher security levels for all in the network.”
IOST claims to have processed over 25 million transactions in the first month of its main net launch with a peak of 580,231 transactions on April 6 to surpass that of Ethereum’s (558,272) by 20,000.