Zcash's zk-SNARKS May Help Ethereum Scale Faster Than Plasma

  • zk-SNARKS technology may allow the Ethereum network to scale more effectively than the Plasma upgrade (alone).
  • Ethereum's developers are now focusing more on zk-SNARKS as a viable scalability solution for the cryptocurrency platform.

Ethereum’s (ETH) developers have explored many different ways in the past few years that could potentially help to effectively scale the cryptocurrency platform’s blockchain. At present, the Ethereum development team appears to be focusing more on zk-SNARKS technology - as it could be used to develop a viable scalability solution.

As CryptoGlobe reported in late September, Ethereum co-founder Vitalik Buterin had said that Zcash’s zk-SNARKS technology could be integrated into Ethereum’s codebase, and that it would allow the crypto’s network to process 500 transactions per second (TPS).

Should this happen, then it would be a significant improvement as the Ethereum blockchain is (currently) only able to handle 15 TPS. In late October, Buterin had said that Ethereum 2.0 (“Serenity”) was “really not so far away.”

The Ethereum 2.0 ("Serenity") Upgrade

According to Ethereum’s developers, the Serenity upgrade will include:

  • Successful transition from current proof-of-work (PoW) to proof-of-stake ("Casper"),
  • Scalability ("sharding"),
  • Virtual Machine Improvements (EWASM)
  • Improvements to cross-contract logic
  • Improvements to protocol economics

In addition to the planned upgrades mentioned above, there were many discussions related to using zk-SNARKS technology during the 4th annual “builders” conference (DevCon4).

Commenting on how zk-SNARKS could be used to help the Ethereum network scale, Stefan George, the chief technical officer at Gnosis, a decentralized prediction market platform, told Coindesk

More and more people understand what the possibilities are. Even beyond zero-knowledge, it's also a great scalability tool that ethereum is missing, and we can use it without waiting.

Stefan George

zk-SNARKS Is "More Decentralized" Than Plasma

George added that a zk-SNARKS based scalability solution could be deployed much faster compared to Plasma (“a technique for [quickly] conducting off-chain transactions” in order to reduce network congestion), and it is also more decentralized than the latter.

Proposed by Buterin and Joseph Poon, the co-author of Bitcoin’s (BTC) Lightning Network whitepaper, the Plasma upgrade involves moving computations for smart contracts off of the main Ethereum blockchain.

Although a lot of research has been done and developers have tried many different implementations of Plasma, the efforts so far have not been successful.

At Devcon4, David Knott, a plasma researcher at OmiseGo, had described a “minimal viable plasma” implementation as having restrictive “time constraints, [was] horrible for UI, and is vulnerable to network congestion."

Kelvin Fichter, another plasma researcher at OmiseGo, told Coindesk that one of the most common problems with Plasma may be addressed by using zk-SNARKS technology.

DApps Running On Plasma May Use zk-SNARKS

Fichter explained that decentralized applications (DApps) running on a Plasma-based network could utilize zk-SNARKS to verify transactions on the main Ethereum blockchain - without requiring sidechains or any other second-layer solution.

He said:

[zk-SNARKS] solve what we were solving with crypto-economic assumptions with just straight up with cryptographic assumptions. It means we have to worry about a lot less.

Kelvin Fichter

Moreover, zk-SNARKS could enhance the privacy of transactions on a Plasma-enabled Ethereum network.

However, Fichter noted: “purely zero-knowledge systems and making use of zero-knowledge systems in plasma is still a little bit far away. There's work that remains on 'Do we make hash functions cheaper?' and once we get to that point, we are going to see an explosion of zero-knowledge applications."

IBM’s VP of Blockchain and Crypto on World Wire, XLM, Ripple, XRP, and BTC Price

On Wednesday (February 20th), during an interview with Australia's largest comparison site Finder.com.au, Jesse Lund, IBM's Vice President of Blockchain and Digital Currencies, talked about his company's cross-border payments solution "IBM Blockchain World Wire"(which runs on the Stellar network), how this product differs from what Ripple is doing with xRapid, and gave his medium term (end of 2019) and long term (some day) price predictions for Bitcoin (BTC).

In this article, we focus on some of Lund's most interesting comments made during this interview.

IBM Blockchain World Wire

"The architecture of World Wire is really a cross-border payment network, the magic of which is the ability to send a payment message instruction saying 'Hey, I'm sending you something; get ready!' and on the other end, the receiver is making sure that who you are sending it yo is not some nefarious actor or bad actor, but once that happens, and that happens really fast, then we send the value along, and that transfer of value is made possible by an ecosystem of digital settlement instruments, of which [Stellar] lumens is one."

"IBM's long game in this is to be the network operator... So, the subscribers, the customers, if you will, of World Wire are market makers who really provide the pay in, pay out locations, and they themselves have corporate clients and probably retail clients. So, we're really providing a kind of conduit through which money can flow in real-time." 

IBM Blockchain World Wire vs. Ripple's xRapid

"Credit Ripple for the vision of using a digital asset in order to enact immediate settlement with finality. I think their implementation followed one path. Our implementation is a little bit different. We are not the issuer of an asset. In fact, what we believe is that there should be an ecosystem of a variety of digital assets that provide the settlement instruments that enable these cross-border payments. The participants on the network should be able to choose and negotiate their choices in real-time and the pricing might be different depending on the settlement instrument you use. So, I think with Ripple, they're looking at XRP as the primary digital asset for settlement, and for us, it could be lumens, it could be Ripple, it could be XRP even, it could be Bitcoin, but it would also probably include other instruments like stablecoins and even eventually, hopefully soon, central bank issued digital currencies."

Bitcoin (BTC) Price Prediction

"[Bitcoin's price at the end of 2019] ... I think it's going be higher [than today], I'll go with $5,000, but let me just say this. I've got a long term outlook... I see Bitcoin at a million dollars some day. And I like that number because if Bitcoin is at a million dollars, then satoshi is on value parity with the U.S. penny, right? And that means there's $23 trillion of liquidity in this network. Think about $23 trillion in liquidity and how that changes things like corporate payments, large payments, and what that does to the financial services landscape."

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