What is Plasma and how it is going to help Ethereum? In this post, we are going a little bit technical to discuss the future of the blockchain technology.
It is a framework proposed by Joseph Poon and Vitalik Buterin (co-founder of Ethereum) on Scalable Autonomous Smart Contracts. Plasma incentivize and executes scaleable smart contracts that allow for billions of state updates per second. This architecture enables the blockchain to represent a significant amount of decentralized financial applications worldwide.
Poon and Buterin published a paper in 2017, which includes the figure above and the following excerpt, to explain the system briefly.
The contracts themselves are located on the root blockchain. The Plasma chain contains the current ledger state which can be settled and redeemed on the root blockchain… On top is the Lightning Network, which allows for instantaneous payments across Plasma and Block Chains.
One of the most important concerns about blockchain technology is its scalability. For instance, a process for a transaction with Bitcoin may take up to several hours due to verification stage. Considering the current usage of cryptocurrencies, it may not be a problem. Nevertheless, in future real world applications, securing the payments with blockchain technology will be important. Traditional payment processing networks can currently handle over 2,000 transactions every second.
How Plasma is going to help Ethereum?
Just to clarify, this is independent of and strongly complementary to base-layer PoS and sharding.
— Vitalik "Not giving away ETH" Buterin (@VitalikButerin) August 10, 2017
At this point, we should clarify the difference between Bitcoin and Ethereum. Unlike Bitcoin, Ethereum’s value comes from its status as an application platform. It has a great technology for creating smart contracts and integrating with Plasma. Earlier this month, the co-founder of Ethereum Joseph Lubin, discussed the solutions for scalability problem of Cryptocurrencies in the Ethereum Community Conference. Implementing such technologies successfully may give an Ethereum the chance to be the leader of the Cryptocurrency market in the future!