Ethereum is preparing for a revolutionary journey geared to take blockchain to new heights.
Ethereum, a prominent blockchain based project known for its smart contracts and unique creator, Vitalik Buterin, has grown wildly since it's deployment mid 2015. Ethereum was designed for decentralized applications beyond cryptocurrencies built on blockchain technology. Though built on the blockchain similar to Bitcoin, Ethereum has a much different goal in its future. Bitcoin is a cryptocurrency, designed to store and transfer value in a decentralized and secure fashion. As such, Bitcoin will only ever be a currency, which is great! That leaves us with a whole slew of real world applications waiting to be implmented on the blockchain and that's where Ethereum fills the void.
In comparison, Bitcoin is deployed utilizing a massive network that maintains data pertaining to value transactions and incentivezed by fees. The Bitcoin blockchain is meant to have a single purpose and as time progresses it's proving to not do that so well. Recently the Lightning Network that acts as an intermediary layer able to process mass amounts of data much quicker was developed to ease some of these concerns. Lightning Network essentially allows sub channels where multiple transactions can take place that propagate as a single transaction to the primary Bitcoin, or parent, blockchain. Read more: Lightning Network. The Lightning network coupled with Segregated Witness or SegWit potentially allows for the Bitcoin network to scale out transactions to a massive scale. Though, in long term reality, it may not be that simple. Considering that every node used to secure and decentralize Bitcoin transactions must maintain and validate against the entire blockchain and the Lightning Network can only provide channels that must validate through the parent chain, mass adoption and the havoc it can wreak on the chain becomes a nightmare. Please read an excellent article we came across that goes in to much more detail regarding Bitcoin, Lightning Network and scaling concerns: https://medium.com/@jonaldfyookball/mathematical-proof...
In contrast, Ethereum is acutally quite similar in sense there is a coin, token, what have you and it is deployed on a blockchain. The difference lies in the underlying Ethereum ecosystem. Ethereum has a feature called 'Smart Contracts'. Smart Contracts allow a multitude of different scenarios to be programmed, reside and executed on the blockchain. For example, this could mean an event organizer may program a smart contract for donation purposes that users could then commit to donate to. What makes it really nifty is that many contracts can be programmed to work with and que off of other contracts to accomplish many tasks. This means, that our organizer can ensure that users donation is only executed once a goal is reached. This is just a simple array of the multitude of other real world applications that could take place. Below is an infographic I like that helps to explain the vast possibilites:
Of course, this is still just a small example of the possibilites blockchain and smart contracts can help accomplish.
Granted, the functionality and possibilities are limited only by ones imagination, the storage of the data required to make those dreams reality are not. Considering smart contracts are programs that can often contain many sets of instructions, and a large task may require many contracts, that data begins to add up quickly. As we've seen recently with Bitcoin congestion and the reasonings behind SegWit and the Lightning network, congestion on the network can lead to high fees and other general havoc that is far from a good experience. That said, Ethereum's scalings concerns are multiplied and have recently been discussed https://ethereum.stackexchange.com. The sheer amount of data being processed and stored on the blockchain is growing at an unsustainable rate. This is where Plasma comes in.
Plasma, in the simplest sense, is quite similar to the Lightning network as it was co-written by Joseph Poon , co-creator of the Lightning Network. The goal in all cases is to split out many transactions that can essentially be packaged into a single, smaller, state on the parent blockchain. Some may say, 'There's already things like Raiden', and I would agree. Raiden is also essentially Lightning network on top of Ethereum. Effectively, with Raiden, you would have a 'centralized' transaction processor that rapidly processes transactions then interacts with the parent blockchain. Problem here, besides the idea that it's basically a centralized solution and it's a third party is that it still only speeds up the inevitable. While transactions may rapidly process, thus making users happy, there is still the underlying data that builds up on the Ethereum network. Without solving the problem on the parent network, you're only applying a band-aids. Plasma is set to not just be a long term highly scalable fix, if implemented as stated in the white paper, it could take blockhain to the next level.
The TL;DR idea of Plasma; Utilizing 'sub-chains' along with fraud proofs, consensus, incentive and other mechanisms the Ethereum network can expand to potentially billions of transactions per second. Plasma is the potential stepping stone to creating a vast network where anything and everything is the blockchain.
To expand, Plasma is the ability to create smart contracts that are essentially blockchains in and of themselves labeled Plasma Contracts. The contracts can have many sub-contracts that utilize several layers to perform validation, consensus, etc.. and eventually propagate as a single state on the root or Ethereum blockchain. Where it begins to get fun is the idea of running 'off-chain'. Plasma, using certain standards and incentives, gives the Plasma contract network the capability to validate amongst themselves in a PoS manner while still validating the 'host' or parent contract and propagating its state to the root blockchain. The incredible scale comes from the potential to split out massive amounts of work into small individual tasks across the sub-contract networks while applying MapReduce to process the transactions at incredible rates. If you've done any IT research over the past few years you would have heard of Hadoop and all the buzz around massive scale distributed computing. MapReduce is one of the core functions of Hadoop and has proven over time to make parallel processing of large data sets feasible. Take a look at a CERN article to get a better idea. Utilizing off-chain, PoS Plasma Contracts with the capabilities to MapReduce billions of computations makes this an exciting project to watch.
Don't get me wrong, this is still just a white paper, with many logistical hurdles in its path. Also, don't underestimate the will of some to change the world. In the long term, decentralized needs to mean more than just several thousand nodes that validate a given item. Decentralization needs to mean anything, everything and everywhere. Once we've reached anything closer to this we are just a hop away from creating a massive, unified community of data sharing beings. Of course, this is a long ways off, and my vision of things may be a little out there. The bottom line is we are on the edge of a digtial revolution of mega porportions.