Each and every blockchain has a difficult task they need to solve, the blockchain trilemma — decentralisation, security, and scalability.
- Decentralisation to ensure that no single entity (or group) can control the blockchain
- Security to ensure that your money is safe
- Scalability for fast and cheap transactions
Many blockchains try to convince you that they are the fastest and cheapest, and that may be true, but this comes at a cost. They may forgo decentralisation (and security) by being centralised and having just a small number of validators, putting you at risk of hacks and bad actors. Others find that they slow down as actual use grows and they can no longer handle the number of transactions. They are fine up until a certain point before it becomes apparent that they just can’t scale.
What is clear is that so far none of them has managed to successfully solve all three… yet.
With over 5,000 nodes and over $5,000,000 a day in fee generation Ethereum has two of the blockchain trilemma elements in the bag — decentralisation and security- two elements which go hand in hand. The more decentralised a blockchain, the more secure it is, and Ethereum is very decentralised and very secure. What Ethereum struggles with is scalability. With such a huge number of people making transactions, and by being limited to just 15 Transactions Per Second (TPS)*, gas wars are inevitably created, pushing prices higher and higher
Ethereum simply isn’t as fast or cheap as it needs to be for widespread use.
However, the Ethereum community are nothing if not fantastic innovators, and for that reason the past 18–24 months has seen huge steps towards solving this final part of the blockchain trilemma — scalability.
* for comparison VISA reportedly does ~1,700 TPS.
There are many parts to the scalability puzzle. Various changes are being developed and implemented at the blockchain level, such as a move to Proof of Stake and the development of technologies like danksharding. While these changes may not necessarily make Ethereum faster or cheaper by themselves, they do assist with making other scaling technologies more efficient.
There are a number of these scaling solutions in development and use, however the one that this post is interested in are known as zero-knowledge rollups, or zkRollups.
In its most basic terms, zkRollup technology takes all the complicated computation involved in transactions, bundles up the proof of these transactions, and broadcasts this proof to the blockchain. Doing your transactions off chain means that you can do a lot more of them. Whats more the proof of each transaction is a smaller amount of data than the entire transaction. This means you can send a lot of transactions in bulk and share the cost between users.
This means that zkRollups can scale Ethereum to 2,000+ TPS, make each transaction up to 100 times cheaper than Ethereum’s Layer 1, all while retaining the security of Ethereum’s mainnet.
Of course this is a very basic overview of zkRollups and what they do. If you want to dive deeper into the decentralisation, security, and scalability offered by zkRollup technology you can check out the following resources.
Where Can I Use zkRollups Today?
If you want to experience Ethereum scaling first hand then one of the most simple ways to do so is via the Numio app.
Released in 2020, Numio was the first mobile application to be built on zkSync, the zkRollup scaling solution developed by Matter Labs, one of the big hitters in Ethereum scaling.
Version 1.0 of the Numio application was quite simple. You could send and receive various Ethereum tokens across the zkSync network at a significantly lower gas fee than you could on Ethereum’s layer 1. The most recent release however, Version 2.3, takes the Layer 2 experience to the next level with access to fast, low fee, DeFi and fiat on-boarding.
Just this week I have been swapping tokens and paying anywhere between 10 cents and $1.00 in gas fees per transaction. The vast majority of these swaps were below 20 cents, with the $1.00 fees only appearing when the gas on Ethereum Layer 1 was excessively high. That $1.00 may seem a lot but anyone using a Layer 1 platform such as Uniswap at that time would have been paying $200+.
The Numio app has also solved another pain point — getting tokens onto Layer 2 without those large gas fees involved when moving directly from Ethereum Layer 1 to Layer2. This has been achieved by the integration of a direct Layer 2 fiat on-ramp — a direct way to buy crypto quickly with a conventional debit or credit card and have it added directly to your L2 (zkSync) wallet.
These two money saving features are just two of the groundbreaking technologies that Numio offers to help you enter the world of crypto in a safe and secure way.
Other features of the app include;
- Secure registration and login — this can be anonymous or via fast, easy, and very secure biometrics
- NFT support so you can show off your prized NFT collection
- An optional AI powered KYC system powered by zkProofs that allows you to prove your identity without ever disclosing your documents to a third party
The team at Numio has a strong belief that users should have complete control over their funds and for that reason the app is non-custodial and there is no vendor lock-in.
With Layer 2 scaling Ethereum is fast, cheap, and secure — why would you want to use anything else?
Photo by Robin Schreiner on Unsplash
Ethereum Is Fast, Cheap and Secure with Layer 2 was originally published in DataDrivenInvestor on Medium, where people are continuing the conversation by highlighting and responding to this story.