Advanced Cryptocurrency Topics: Ethereum’s Plasma Intro

Part I — Revisiting Ethereum & Digging Into Scaling Issues

Jesus Najera
5 min readOct 5, 2017


Ethereum & Vitalik Buterin. Together, product & founder, exploded into cryptocurrency celebrity-status almost immediately after going live in mid-2015. They’ve since remained the universal poster children for the Blockchain 2.0 revolution. Bitcoin leveraged the concepts of a blockchain, a protocol (the Nakamoto Consensus), & a digital currency to to create an immutable, decentralized network that, at a high level, runs a single core feature: maintaining a public, universal ledger of verified transactions with said cryptocurrency.

Vitalik’s, Ethereum’s founder, brilliant insight was the realization that blockchain could be used for vastly more ranging forms of computation; as opposed to the somewhat limited functionality of Bitcoin’s blockchain which is limited to strictly Bitcoin-as-a-universal-currency functionality.

Ethereum, instead, leveraged the concepts of a blockchain, protocol, & digital currency to create an immutable, decentralized network that maintains the states of user-created decentralized apps. Building dapps (decentralized apps) on the blockchain, thus the 2.0.

Where Is Ethereum Today?

Unfortunately, with this revolutionary leap of blockchain adoptability came an equally drastic leap of scaling issues. Bitcoin, as a blockchain running what’s in essence a single banking dapp, is facing serious scaling issues — can you imagine what scaling issues a blockchain built to compute an ever-growing amount of dapps faces? For some quick math, here are a few relevant numbers: Ethereum averages 13 transactions per second; Ethereum tokens can handle roughly half that at 7 txs/sec. Facebook, for a frame of reference, makes about a whopping 195K requests per second.

By [my] estimate we’re roughly 250x off being able to run a 10m user app and 25,000x off being able to run Facebook on chain. A 100x scaling improvement would allow a 1–10m user app.

— Fred Ehrsam (prev. cofounder @ Coinbase)

The number of transactions per second is capped via the established gas limit. Ethereum miners can certainly simply increase the gas limit, however this is a symptom-stopper…



Jesus Najera

Owner @ SetDesign, NightKnight & CryptoSpace | Product Designer | Hobbyist Mathematician | VR Developer | MS in Finance @ UF