Huge upgrade for Ethereum (and Omisego)

The Ethereum (ETH) team has found yet another solution to its scaling problems. After the presenting the Raiden network which increases the amount of possible transactions for ETH, Joseph Poon and Vitalik Buterin have now proposed a solution that will drastically increase the speed and potential volumes of smart contract executions: Plasma.

This is a huge news for Ethereum, but also for Omisego (OMG) which is up 75% at the time of writing this post and is using Plasma as one of the underlying technologies of the currency.

So what is Plasma exactly?

The abstract of the whitepaper states the following:

"Plasma is a proposed framework for incentivized and enforced execution of smart contracts which is scalable to a significant amount of state updates per second (potentially billions) enabling the blockchain to be able to represent a significant amount of decentralized financial applications worldwide."

The extract is not easy to read and the whitepaper is very dense, giving even very experienced developers a hard time reading and understanding it. However, one of our colleagues on reddit did an attempt to make it more understandable for people like me:

"Plasma is a way to create a blockchain (as a set of smart contracts) within a blockchain, by simply committing the root hash of the 'meta' child chain (Plasma) on the main chain (Ethereum).
The child chain acts kind of like state channels on steroids, and only the final state transition hash is committed to the main chain. If someone commits an invalid plasma state transition hash/block, the protocol incentivizes committing 'fraud proofs', where parties who are interacting in the child chain can show that someone behaved maliciously, and penalize them, reversing the faulty transition.
The child plasma chains can themselves also have child plasma chains, and those chains can have child chains, etc..."

So the scaling issues of Ethereum seem to be very solvable. Obviously this needs to be implemented yet, but this is the one last thing that was holding ETH back in my opinion. Paired with the fact that Credit card companies are now hiring ETH developers and the attributes specified in my previous Ethereum post, ETH is all set to attain new highs.

We may even see the flippening discussion pop up soon again ;)

Stay tuned!

Sources:
https://www.reddit.com/r/ethereum/comments/6sqca5/plasma_scalable_autonomous_smart_contracts/
https://steemit.com/ethereum/@attalis/ethereum-harder-better-faster-stronger
http://blog.flippening.watch/what-is-the-flippening/
Images:
https://worldvectorlogo.com/logo/ethereum