Last week, Tesla CEO Elon Musk suddenly claimed the following about Dogecoin (DOGE):

Musk was immediately criticized for that. According to well-known developers from the cryptocurrency industry, you cannot just do this. Adam Back, CEO of Blockstream and one of the most prominent Bitcoin (BTC) developers, among others, addressed this.

Now tech-savvy Ethereum (ETH) founder Vitalik Buterin has also extensively expressed his views on Musk’s statement. In his paper, Buterin poses the question: How far can you push the scalability of a blockchain? Is it possible to do that as Musk wishes without compromising a blockchain and creating extreme centralization?

According to Buterin, there are two ways to scale a blockchain: by making fundamental adjustments or by simply increasing the parameters. Buterin elaborates on why blockchain scalability has certain important limits, especially when it comes to factors such as computing power, bandwidth and storage. If you scale this up too far, users will no longer be able to run a node (computer on the blockchain) and that is of “crucial importance” to decentralize the network.

Let's get one thing straight: You defend against malicious protocol changes by having a culture of users who validate the blockchain. Not by having Proof-of-Work (PoW) or Proof-of-Strike (PoS). ”

According to the well-known crypto researcher Hasu, quoted by Buterin. Buterin says simply increasing parameters, which Musk suggests, is a “fundamentally incorrect approach”:

“Increasing the parameters sounds very appealing at first: if you do the math on a napkin, it's easy to convince yourself that a consumer laptop can process thousands of transactions per second, doesn't require ZK-SNARKs or rollups or sharding. Unfortunately, there are many subtle reasons why this approach is fundamentally wrong. ”

Technical adjustments might work, such as sharding, says Buterin. Sharding is the splitting of chains on the blockchain so that they can process transactions in parallel. Ethereum plans to introduce this later this year, but there are limits to this too, says Buterin:

“Sharded blockchains can scale up much further, because no single node in a sharded blockchain has to process every transaction. But even there, there are limits to capacity: as capacity increases, the minimum number of safe users increases. It will take work to do this without sacrificing the decentralization that makes blockchains so valuable. ”

Of course Musk does not go into it and only responds with a silly joke, but now we are no different from him. Musk himself previously criticized Dogecoin for centralization because a small group owns a very large amount.


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