Scalability Solution of Ethereum – Plasma

Cryptocurrency such as bitcoin is characterized by being able to manage a transaction history that is difficult to falsify by recording the transaction history on blockchain which is decentralized management ledger without involving an entity such as a bank.

In addition to recording transaction histories, Ethereum can also be used as a platform for next-generation decentralized applications (DApps) running on P2P systems by integrating smart contracts.

Meanwhile, in order to operate DApps on the blockchain on a large scale, Ethereum specifications that can only complete 15 transactions per second are stagnation problems. If new technologies such as “Plasma” and “Sharding” are implemented, the transaction volume per second will be greatly increased, and the practical use of DApps will receive great attention.

The scalability Issue of Ethereum

Although Ethereum is a blockchain platform well-renowned after bitcoin, it faces the scalability issues with transaction processing delays due to the lack of the block data capacity.

This problem has seriously affected the current operation of the platform. The users flooded into Ethererum network when the ICO was started, which often caused the transaction processing to stagnate. It not only hindered the Ethereum ICO, but also affected the price of Ether.

The New Technology “Plasma” to solve the scalability problem

In the past, technologies to cope with scalability problems of Ethereum have appeared, but the newly announced “Plasma” is a remarkable technology. In Plasma development, Vitalik Buterin, founder of Ethereum and Joseph Poon, co-developer of Bitcoin’s Lightning Network, key persons in this field, collaborated to form the strongest technical team. According to the White paper on Plasma announced last August, it is possible to reduce the data size stored on the blockchain, improve the execution speed of the transaction, and execute larger data size transactions smoothly.

Plasma is a side-chain technology based on a hierarchical tree and is a framework that solves scalability problems by autonomously forcing a large number of transactions.

In short, the scalability problem is that users need to keep a copy of the entire blockchain, their own complete record of the history of transactions and computations, to check Ethereum’s history. While it is necessary to keep a huge data, general users wouldn’t be able to store them on their devices today.

To solve this problem, Ethereum and other public blockchains are searching for ways to reduce the amount of data that’s continuously kept directly on the chain.

How Plasma works

Plasma may be able to become a solution for the scalability problem by dividing blockchain into a parent chain and child chains.

The “child” chains connect to the “main” blockchain with the function called “fraud proofs” in this system. This system works just like the Lightning Network, an idea Poon put forth a couple years ago for bitcoin, a top-layer interacts with a core blockchain below in it.

The child chain in Plasma has three layers (hierarch levels) in tree format. Transactions are approved in each layer, the parent chain receives the only those results and finally it is recorded on the blockchain. At this stage, only block-header hashes are submitted rather than the whole data. In other words, Plasma is a set of nested structure as if the blockchain is embedded in the blockchain.

What is “fraud proof”?

A“Fraud proof “ is a way to prove that a block is invalid. Users have all blockchain data in Plasma, therefore, they can create and relay a fraud proof to the main network. In that case the block is rolled back and the block creator is penalized. Plasma intends to prevent fraud by creates a mechanism that users to have all blockchain data.

New Idea for Plasma Scaling On Ethereum

The Ethereum founder Vitalik Buterin made an announcement of a scaling solution for Plasma at the Ethereum community conference EthCC in Paris in the beginning of March this year, which is a system of smart contracts that seeks to increase the computational potential of the world’s second-largest blockchain.

According to Mr Buterin, the benefit is that the amount of data that clients need to process decrease by a large amount.

The system which inspects only the token history harnessing the smart contract

Users will be able to generate a token “Plasma coins” by sending a deposit to the contract instead of downloading the entre Plasma history. Then users are able to inspect the “Plasma coins” which was generated in the system.

The new countermeasure for hacking at cryptocurrency exchanges

It is believed that the exchanges will be able to guarantee losses through Plasma smart contracts by provide order book functionality rather than dealing directly with user’s funds.


Although Ethereum has been applied to many more platforms. Now, many companies and investors are paying attention to it as it plans to introduce additional value and raise its awareness by introducing Plasma technology. In the future, if the development and implementation of Plasma, a breakthrough in the scalability solution, were successful, the performance of the Ethereum blockchain would be greatly improved and the price of Ether could rise further. We will keep an eye on Ethereum blockchain technology development.



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