#CryptoExplained: Ethereum is Still a Work in Progress

Ethereum is not yet the base layer of trust on the internet. To get there it has to go through several more upgrades. As it does so, the way it operates will continue to change and evolve. But because Ethereum is the primary ecosystem for most crypto, each stage of evolution will create new opportunities for technologies, innovations, and businesses. 

The biggest change coming to Ethereum in the near future is the move to something called Proto-Danksharding. This is a way for Ethereum to scale the number of transactions it can process. Currently, Ethereum is a single blockchain which can process around 15 transactions per second. After this upgrade, it should be able to process over 100,000 transactions per second. For reference, Visa can process 1,700 transactions per second.

Transaction fees currently are also very high, and often become prohibitively expensive when a lot of people are using the Ethereum network at the same time. But this will also change with future upgrades and expectations are that fees will drop to less than $0.001. With high transaction volumes and low fees, Ethereum will improve the economics of the businesses that run on it. 

Upgrades that Increase transaction volumes and lower fees will likely take place within the next two years and are much needed. However, the Ethereum roadmap is also looking at what Ethereum will look like beyond the next two years. 

In several talks, Vitalik has discussed various possibilities for the future of Ethereum. Most of these include the “outsourcing” of certain tasks away from the network itself. For example, the Ethereum blockchain currently contains all the transactions since the first one. This means that maintaining the network requires a lot of memory from participants. One of the proposals for the future state of Ethereum is to incentivize service providers to store historic data and only maintain two to three years worth of information at a time. This could create new business models around archiving old data.

Future upgrades will primarily focus on making Ethereum even more efficient and getting it to a state where it will no longer require significant changes for 10 to 20 years. This is because every time Ethereum is upgraded, trillions of dollars are affected and businesses built on Ethereum have to expend several hours of technical expertise on ensuring their tech is ready for the change. For Ethereum to truly become the base layer of trust, it will need to stay constant in a rapidly changing world. 

As the base layer of trust strengthens collaboration around the globe, humanity could solve some pressing challenges like climate change, poverty, and becoming a multi-planetary species.