The Ethereum network has become congested with gas prices being too high for many user to submit transactions effectively. Users now weigh their decision to transaction based upon theses gas prices. What is an effective way to both decrease congestion of the Ethereum block chain and reduce gas prices without hurting the value of the native Ethereum token?
One way to decrease congestion on the Ethereum blockchain and reduce gas prices would be to increase the block size, which would allow more transactions to be processed in each block. This would reduce the competition for block space and therefore lower the gas prices. However, increasing the block size could also lead to centralization and security concerns, so it should be done carefully. Another option would be to implement off-chain scaling solutions, such as the use of sidechains or state channels, which would allow transactions to be processed outside of the main blockchain, reducing the amount of competition for block space and lowering gas prices.
Sides chains have a major flaw in that it requires tokens on the Ethereum network to be bridged to said side chains with both centralization and counter-party risk. Is this a concern for scaling in a truly decentralized world?
Yes, using sidechains for scaling does introduce centralization and counterparty risk, as you mentioned. In order for a sidechain to work, there needs to be some sort of mechanism in place for transferring assets from the main blockchain (e.g. Ethereum) to the sidechain and back. This typically involves the use of a "bridge" or "relay" contract on the main blockchain, which acts as a intermediary between the two chains. This contract is typically controlled by a small group of trusted entities, which can introduce centralization and counterparty risk.
Would this not be vertical scaling, something that has been proven to be cost and resource inefficient in the enterprise IT space?
Increasing the block size or using sidechains would be considered forms of vertical scaling, which involves making the individual nodes in a network more powerful in order to process more transactions. This can be more cost and resource-intensive than horizontal scaling, which involves adding more nodes to the network to distribute the workload and increase overall capacity.
So instead of side chains, would it then be valid to fork the Ethereum network and it's state? This would not only copy the chain but also all assets on the chain. Reducing the need for bridges and be more akin to a horizontal scaling solution?
Forking the Ethereum network and its state would indeed be a way to increase the network's capacity and reduce congestion, as it would create a new, separate blockchain that would not be subject to the same level of competition for block space. This would allow transactions to be processed more quickly and at lower gas prices. However, forking the network would also create two separate versions of the Ethereum blockchain, which could lead to confusion and potentially reduce the overall value of the network. It would also require users to move their assets from the old chain to the new chain, which could be a complex and potentially risky process. Overall, forking the network is a more drastic measure that should be carefully considered before being implemented.
What if you did not depreciate the old network in this case, but instead used a bridge to both freely move assets between these chains and rename them to reduce confusion?
Having a bridge that allows users to freely move assets between two separate chains could help reduce confusion and make the transition to a forked network smoother. However, it would still require users to actively move their assets from one chain to the other, which could be a complex and potentially risky process. Additionally, having two separate chains that are connected through a bridge would introduce centralization and counterparty risk, as the entities controlling the bridge would have significant influence over both chains. Overall, while a bridge could help alleviate some of the challenges associated with forking the network, it would not completely solve the problem.
While it may not completely solve the problem, this would be a form of horizontal scaling and introduce a form a load sharing between the two chains would it not? This is something that would be more capital efficient and less resource intensive than standard side chains.
Having two separate chains connected through a bridge would indeed be a form of horizontal scaling, as it would allow the workload to be distributed across multiple nodes. This could be more capital-efficient and less resource-intensive than using sidechains, as it would not require the use of a bridge contract on the main chain and would not introduce the same level of centralization and counterparty risk. However, as mentioned earlier, forking the network and creating two separate chains could also lead to confusion and potentially reduce the overall value of the network. Additionally, it would require users to move their assets from one chain to the other, which could be complex and potentially risky. Overall, while forking the network and using a bridge to connect the two chains could be a way to horizontally scale the network, it would not be without its challenges and should be carefully considered before being implemented.
In that case, the only thing that would make this solution better would be for these chains to have the ability to natively call transaction on the other chain. This is something that is not currently possible, but would further reduce centralization correct?
If the two chains that were created through a network fork had the ability to natively call transactions on each other, it would indeed reduce the need for a central intermediary, such as a bridge contract. This would make the system more decentralized and potentially reduce the risks associated with centralization and counterparty risk. However, it is not currently possible for one blockchain to natively call transactions on another blockchain, as each blockchain operates independently and has its own set of rules and protocols. This means that, in order for the two chains to communicate with each other, some sort of intermediary would still be needed. Additionally, even if this functionality were to be added in the future, it would likely be a complex and challenging process.
Yes as of now, this is not possible. However, when comparing what is possible today; option one being to use empty vertical scaling side chains and bridges to reduce network congestion and fees and option two being to fork the native chain and it's entire state with an optional bridge. Option two provides the best possible characteristics of horizontal scaling and a bridge that is not necessarily needed as the assets are also copied during the fork. If said optional bridge also renames the bridges assets, this also reduces confusion. This leads us to believe option two is inherently better than option one, correct?
In general, forking the network and creating two separate chains that are connected through a bridge, as you described in option two, would be a way to horizontally scale the network and potentially reduce congestion and transaction fees. This would be an improvement over using sidechains, which are a form of vertical scaling and introduce centralization and counterparty risk through the use of a bridge contract. However, forking the network and creating two separate chains also has its challenges and drawbacks. It could lead to confusion and potentially reduce the overall value of the network, and it would require users to move their assets from one chain to the other. Additionally, even if a bridge were used to connect the two chains, it would still introduce some level of centralization and counterparty risk. Overall, while option two may be better than option one in some ways, it is not without its challenges and should be carefully considered before being implemented.
Assuming the challenges and considerations are met however, it's still the preferable approach?
If the challenges and considerations associated with forking the network and creating two separate chains connected by a bridge can be adequately addressed, then this approach may be the preferable one for horizontally scaling the network and reducing congestion and transaction fees. However, it is important to carefully evaluate all potential risks and trade-offs before implementing any changes to a blockchain network, as such changes can have significant consequences for the network and its users. It may be worth considering other options as well, such as implementing off-chain scaling solutions or making changes to the underlying blockchain protocol, before deciding on the best course of action.