Recent Ethereum network congestion: A retreatment proposal for the current state

[aliashraf]

Scaling is not a new challenge neither for Ethereum nor for other cryptos and it is obvious that it won't be resolved in a matter of days or even months. But nowadays a network congestion is the last thing you want to experience wit Ethereum. Number of stakeholders have grown exponentially, regular traders, ERC20 token holders and issuers, Ico's , and now Cryptokitties. It is no longer about a technical controversy or an off-chain/on-chain scaling debate, at this very moment we are talking about people's funds worth billions and we have to act NOW!

Vitalik Buterin is in love with on-chain scaling and techniques like sharding, so it will be the future of ETH, I understand and I have no objections. Actually I like both approaches at once and I think they are not mutually exclusive but I think we have no time, ETh is the only working digital cash right now (the ETH network alone switches more transactions than other crypto blockchains summed up) and it is why unlike bitcoin and others scalability is not a mid-term  issue (bitcoin community has adopted by removing the whole 'cash problem' from its priority list and has focused on a 'store of value' mission).

I'm considering a robust short-term solution for the crisis which I'll publish in the next couple of days, meanwhile it seems an interesting subject to discuss, imo. So please join if you got one or two ideas to share. What urgent actions you might  recommend?

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[twobits]

Scaling is not a new challenge neither for Ethereum nor for other cryptos and it is obvious that it won't be resolved in a matter of days or even months. But nowadays a network congestion is the last thing you want to experience wit Ethereum. Number of stakeholders have grown exponentially, regular traders, ERC20 token holders and issuers, Ico's , and now Cryptokitties. It is no longer about a technical controversy or an off-chain/on-chain scaling debate, at this very moment we are talking about people's funds worth billions and we have to act NOW!

Vitalik Buterin is in love with on-chain scaling and techniques like sharding, so it will be the future of ETH, I understand and I have no objections. Actually I like both approaches at once and I think they are not mutually exclusive but I think we have no time, ETh is the only working digital cash right now (the ETH network alone switches more transactions than other crypto blockchains summed up) and it is why unlike bitcoin and others scalability is not a mid-term  issue (bitcoin community has adopted by removing the whole 'cash problem' from its priority list and has focused on a 'store of value' mission).

I'm considering a robust short-term solution for the crisis which I'll publish in the next couple of days, meanwhile it seems an interesting subject to discuss, imo. So please join if you got one or two ideas to share. What urgent actions you might  recommend?

What's wrong? Ethereum has gotten mass adoption in this time. It seems the ethereum was holding almost 50% from the total crypto transaction. ERC20 token becomes a world wide trend in this time.
Dapps just like crypto kitties give a real value about the ethereum blockchain. Ethereum is only digital cash to invest in the ico or play with dapps like crypto kitties. but remember the bitcoin was aiming to be the crypto that has the actual use by the way.

[aliashraf]

You may have read about or experienced (like me) the last few days ETH network congestion. Crypto kitties is the first DAP which has been adopted by the crowd and in less than a few days has saturated the network up to a congestion level, being responsible for almost 20% of total transactions in a network that was already near saturation before.

From my point of view, it is totally a dilemma: A network designed for DAP is now under  a heavy demand for payment because the rival, bitcoin, has changed the mood, and with its first actual DAP being populated ... it is not the best situation you can expect for a promising project.

If everything was normal, bitcoin doing its job as an "electronic payment system" and Ethereum doing it as an infrastructure for distributed applications, I'm sure the roadmap that Vitalik and Ethereum Foundation are talking (too much) about was more than enough. Unfortunately it is not the case and ERC20 tokens and DAPs are fighting with each other and ordinary transactions for capacity, a very rare resource these days.

[aliashraf]

Well, for the starter I give an outline:

1- We are dealing with 3 major groups of transactions:
   - Common 'Cash Transfers' on externally owned accounts, CTs.
   - ERC20 'Token Transfers', TTs.
   - Distributed Application, 'DAP Transactions', DTs.

2- TTs and DTs, occasionally take the network over and lead to a congestion status.

3- Crypto market is on the surge and ETH is losing its share in the last months. It can lead to a dangerous situation in which miners quit the network and
    the resulting fall in hashpower reduces the security and the price, starting a new loop.

4- There is NO scaling technology ready to launch.

My proposal:

Categorizing any transaction under one of the three above mentioned classes and putting a 'share limit' for each type in two consecutive blocks.

I suggest no limit for CT, 35% for TT and 15% for DT classes. It can be any deterministic sharing function and should be applied by a hard fork. As of my understanding it is a trivial coding problem and clients can be adopted easily.



  

[Wheelige]

While i'm not heavy into how the eth network ticks I am concerned that this level of congestion, which hasn't showed any indication of easing, is going to have a very adverse impact on the network and any erc-20 tokens. A number of people are concerned about using etherdelta as the fees and time for exchanging tokens can be very prohibitive. Things aren't looking like the are going to get any better short-middle term as more icos are coming out with more erc-20 and more smart-contracts that will generate transactions to clog the network. What about projects that are looking to launch platforms this year? 100 Gwei per transaction is on the cards.

[Sephire]

There seems no good answer or solution in near term. The free market forces will take care
of this problem eventually by more ICOs going to  other platforms like NEO, WAVES, STRATIS
and many others.