CRYPTO WORLD #2 THE NEED FOR SPEED
Turning away from the ton of good things that happened in 2017,
there are the twin issues of slow speed and high transaction fees.
It is a thorny situation.
Each of us can appreciate the need to any system to be
successful has to be capable of scaling.
Appreciating the higher energy consumed can be a bit
more obtuse but it a big deal.
The promise of cryptocurrencies like bitcoin going back to the
beginning was “fast and free”
As the table below illustrates, transaction speeds are stalling
and falling short of the promise.
The high transaction costs for all cryptocurrencies is presently a major
deterrent to broader acceptance.
Depending on how you work the math, performing a transfer in bitcoin
can be more the using a fiat currency and using the traditional
banking system.
Presumably the solution to faster transaction speeds would be less energy
consumed which in turn would allow competition to drive down fees.
At present even 10-15 transactions per second is not nearly enough to
meet projected demand in the future.
Finding a solution is important to everyone from the major currencies like bitcoin,
Ethereum and Litecoin down to companies linked to each.
Some help for Ethereum may be on the way in 2018
when Casper is fully in action.
Casper changes the Ethereum verification process from
“Proof of Work” to “Proof of Stake”.
One of the issues Casper addresses is high-energy consumption.
Part of the issue spills over into security.
In order to maintain adequate security of Ethereum POW protocol involves very high operating costs.
Casper dramatically lowers these costs.
Experts who have deep knowledge of Casper claim that honest miners
will be able to cheaply validate while attackers somehow will still
face extremely high costs.
Casper addresses this problem.
In doing so, Casper puts Ethereum in a much stronger
position to serve the world.
The more users, the more demand for Ether and that, of course means
even more upward Ether price pressure.
And then there is the Ethereum Raiden Network.
This is Ethereum’s version of bitcoins Lightning Network.
The technical definition of Raiden is allowing off-chain scaling solutions for
performing so called ERC20-compliant token transfers
Raiden supposedly enables near-instant, low fee, scalable transactions.
The operative words here are off-chain scaling and privacy preserving.
This is an option to watch closely in 2018 to see if
Raiden can live up to some big promises.
