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Ethereum on Steroids, set to Process 100,000 Transactions per Second Soon!
The second largest cryptocurrency after Bitcoin is Ether. It has the ability to build smart contracts as well as decentralized applications. ETH is mainly known for being used in purchasing Non-Fungible Tokens (NFTs). In as much as ETH has several benefits, it has one problem of processing a few transactions per second. Therefore, the main aim of upgrading the blockchain is for Ethereum to process 100,000 transactions per second.
Transactions Processed on Ethereum Blockchain
From the Coinbase platform, the blockchain of Ethereum supports about 15 transactions per second. This is low as compared to Solana which processes about 50, 000 transactions per second. The network is slow since moderate use may put a strain on the network. This can result in high gas fees and long wait times.
In 2021 when NFTs became popular, the users said that they were paying very high fees. In some cases, it may cost 10% of the purchase cost. As a result, it puts a damper on the usability of ETH. All in all, there is hope as soon, the network will support about 100, 000 transactions per second.
Ethereum is a one-layer blockchain operating Proof of Work (PoW) consensus mechanism. It means that miners have to validate transactions. Because of high decentralization in PoW, the consensus mechanism allows the Ethereum blockchain processes just 15 Transactions Per Second (TPS).
Since the users of Ethereum are increasing, there is a need of increasing the blockchain’s speed. According to Etherscan, transactions in the blockchain currently exceed 1 million. Due to the high demand for this blockchain, network usage has resulted in slow transactions as well as high fees.
Ethereum developers have come up with a solution for transitioning Ethereum’s blockchain from PoW to PoS. The aim of this is to reduce cost, increase scalability as well as speed. The transition of the upgrade is divided into three including the Beacon chain which is complete, The Merge, to be completed in September 2022, and lastly, Sharding which is bound to take place in 2023.
The merge that will take place in September 2022 is the official transition of Ethereum from PoW to PoS. Ether being the native token of the Ethereum blockchain will highly benefit from this upgrade. From this also, its issuance will reduce from 15, 000 per day to 1500 per day. This will represent a 90% cut in emissions.
The reduction in emission is positive because currently, Ether causes about +3.2% inflation annually. Thus, reducing the token’s value. Lastly, after the merge, the supply of Ether will less by -0.9%. The aim of this is to ensure that the token becomes deflationary. Therefore, its scarcity will make the token more valuable.
The Benefits of 100, 000 Transactions Per Second
If the 100, 000 transactions per second are achieved then it will be more usable. It will result in less congestion, lower gas fees, and fast payment processing. The most important this is gas fees because, in 2021, they were a thorn in most of the NFTs’ purchasers.
Latest News from Vitalik Buterin on the 100, 000 TPS
Vitalik Buterin is one of the co-founders of Ethereum. On 21st July 2022, he said that the merge testing is about 90% complete. He said that the only remaining thing is for the Merge to be tested on Ropsten which is a test network. According to him, after the merge, validators will commence withdrawing ETH locked in the deposit contracts. Also, users will be able to develop Ethereum clients which do not know if PoW ever took place.
The surge phase which will be introduced in 2023 will mainly focus on increasing the scalability of the network. Once the road map comes to an end the blockchain will process over 100, 000 transactions per second as opposed to the current one which is between 15 to 20.