The Ethereum Virtual Machine allows for DApp creation and enables code execution for smart contracts. Find out why it's essential with our EVM beginner's guide.

The Ethereum virtual machine (EVM) is often referred to as “the heart of Ethereum” — which is exactly what it is. Just as the heart pumps blood that distributes oxygen and nutrients throughout the body, an EVM grants developers the ability to create smart contracts and DApps in the Solidity programming language. It’s responsible for the majority of DApps being created today, which is what distinguishes it from Bitcoin and other distributed ledgers. In this article, we’ll dive headfirst into Ethereum virtual machines and break down what they are, how they work and their role in DApp development and the advancement of Web 3.0.

Whether you’re a programmer with an interest in DApps or an investor wanting to learn more about the ever-evolving world of EVM crypto, you’ve probably heard of Ethereum virtual 

 best understand what an EVM is, it helps to first learn a little about its history.

According to Vitalik Buterin, Ethereum’s creator, BitTorrent was the very first DApp. 

 invented the file-sharing protocol in 2001, and despite several efforts to destroy it, BitTorrent remains very much alive.

To truly halt BitTorrent, every computer in every home across the world would have to be shut down. It’s a virtual machine unbound by physical constraints. The same is true of the Ethereum virtual machine. The EVM eliminates the need for superpowered hardware, and is an ideal platform for beginning programmers. However, knowledge of bytes, stacks, and blockchain concepts like hash functions and proof of work is helpful when trying to gain a deeper understanding of EVM-compatible code and the Ethereum virtual machine in general.

The Ethereum virtual machine’s purpose is to determine the state of every block in the Ethereum blockchain. While EVMs are similar to other blockchain-based networks in that they use a distributed ledger to maintain databases for transactions, they add another layer of functioning due to their smart contract capabilities. Many refer to this second layer as a “distributed state machine.”

In its most rudimentary form, an Ethereum virtual machine is a large database for holding all of Ethereum’s accounts and balances. At the same time, it’s also a machine state with the ability to execute machine code and change with each new block added to the blockchain ledger. The specific rules that determine how the EVM will change with each new block are actually defined by the EVM itself.

More simply put, an Ethereum virtual machine is a processing engine and software platform that functions like a decentralized computer. From DeFi and EVM crypto apps to games and marketplaces like OpenSea, developers use the Ethereum virtual machine to create DApps based on Ethereum and its EVM-compatible programming language, Solidity.

Most important, the Ethereum virtual machine is the part of the Ethereum network responsible for the execution and deployment of smart contracts. It’s where smart contracts and millions of DApps based on Ethereum blockchain live and breathe.

Think of Ethereum’s blockchain as a P2P structure of different individual nodes. One node connects to the next, making each node responsible for the security and stability of the entire ecosystem. To do so and maintain consensus throughout the Ethereum blockchain, each node uses the EVM.

Ethereum isn’t a CPU — it’s a distributed worldwide network with 100 CPUs simultaneously running the EVM. However, the EVM functions as a virtual CPU or virtual “machine” running inside of the Go Ethereum, or “Geth,” program.

Similar to other software programs, developers create DApps and write smart contracts in a programming language. Instead of Java or C++, the language for Ethereum is called Solidity. Solidity code is compiled into bytecode and distributed to every computer (node) running Geth in the network.

When a smart contract gets deployed, every node receives a copy of it, runs its bytecode and gives the code to whomever called for the deployment, resulting in “state change.” This means the blockchain’s current state has been altered, which can be done only with the consensus of every node.

Therefore, an EVM is often referred to as a “distributed state machine.” It tracks the state of the blockchain as it transforms with each transaction.

If you’ve ever downloaded a song, movie or software from BitTorrent, then you know what a decentralized network can do. Even the world’s most powerful authorities can’t remove it because doing so would require shutting down every computer tied to the network.

One of the best ways of scaling a decentralized network is through the use of virtual machines. Acting as a layer between machines and the code they execute, virtual machines can be run on various hardware and operating systems from anywhere in the world.

Virtual machines like the EVM function similarly to physical machines with CPUs, memory and storage, but they operate as nothing but code. Theoretically, anyone can run a virtual machine, giving it the flexibility and portability decentralized networks need.

The Ethereum virtual machine uses a decentralized nodal network to execute smart contracts. It’s a dynamic, sandboxed virtual stack, embedded inside each Ethereum node to execute EVM-compatible smart contract bytecode.

When learning what EVMs are and what they do for crypto in cases like DeFi lending, keep in mind that smart contracts are written in Solidity and other higher-level languages, and then they’re translated to bytecode and compiled to the EVM. This means the machine code is isolated from the filesystem, processes and network of the host computer.

For each instruction the EVM implements, a cost is assigned to it, allowing the system to keep track of the execution costs. The cost of making EVM crypto transactions and executing other instructions is measured in EVM-compatible units known as gas.

By enabling an economy based on charges for executed instructions rather than executed financial transactions, like Bitcoin, Turing Completeness is achieved. This means the Ethereum virtual machine is a peer-to-peer, globally connected computer, able to create smart contracts, P2P crowdfunding events, file-sharing economies and more.

Not unlike the internet in the early 1990s, the future is there for the taking.

At the moment, there are approximately 150 different opcodes an EVM can execute. So, what exactly are opcodes — and why are they important in understanding EVMs?

The reason the Ethereum virtual machine is referred to as Turing Complete is largely because of its ability to execute machine-level instructions known as 

EVM-compatible opcodes help the EVM complete specific tasks related to EVM crypto transactions or smart contracts. However, opcodes are used for a variety of operations, ranging from arithmetic and data logging to memory and the retrieval of block information.

That said, opcodes aren’t written directly into an EVM. Due to their ability to let developers easily create and interact with smart contracts, EVMs are written in the Solidity programming language. However, this native language must be converted to opcode for an EVM to interpret.

Each opcode is assigned one byte. This means a maximum of 256 opcodes can be used.

When trying to understand what an EVM is, a basic knowledge of smart contracts and their role in EVM crypto, DeFi and other blockchain functions is necessary.

Sometimes referred to as the “App of the EVM,” smart contracts are EVM-compatible lines of code used by parties to transact with one another without the use of a third party, or interference from central authorities.

Within each smart contract is a defined list of operations that are to be executed when certain on- or off-chain conditions are met. These operations can range from the transfer of funds to certain addresses, to the creation of new smart contracts and the communication between existing ones. Instead of requiring a third party, anyone can send funds to a smart contract address to prompt these operations.

Ethereum took the Bitcoin concept and supercharged it by allowing developers to build smart contracts on top of their blockchain. The next step was creating an environment where smart contracts could live and interact with one another. This is where the Ethereum virtual machine comes into play.

The EVM combines the resources of not just one but thousands of CPUs connected to Ethereum’s network. In addition to verifying transactions, it translates smart contract opcode written in Solidity into bytecode, so instructions can be read and operations can be executed. For this last part, you need gas.

Each opcode is assigned a gas cost. The more complex the opcode, the higher the gas fee. At the moment, the starting cost of every transaction is 21,000 gas.

Gas fees are charged to compensate the validators responsible for checking to make sure the transaction information is valid, and that there are no exceptions or errors from the EVM.

Even more important, gas fees help prevent 

 attacks and keep the network secure. Since deploying complex contracts at scale would require lengthy and expensive computations, attackers are monetarily discouraged from making any malicious attempts. The attack would simply be too expensive to run.

Interoperability between blockchains has proven to be a significant problem. As issues with Ethereum — such as high gas fees and slow transactions — persisted, developers began creating DApps and smart contracts based on other permissionless blockchains to offer faster transactions and lower gas fees. Unfortunately, many of these blockchains are severely limited and lack interoperability with other blockchains.

EVM-compatible blockchains have proven to be an easy way of solving this issue. Rather than starting from scratch and creating an environment similar to that of EVMs through the use of cross-chain bridges, developers can copy certain pieces of the Ethereum network, and create DApps that allow users to quickly and easily transfer assets between any EVM networks.

With this interoperability, many of today’s most used blockchains follow this EVM-compatible model. Examples include some of the biggest names in the EVM crypto space, such as:

Ultimately, when discussing EVM-compatible blockchains, it all comes down to optimization and creating the best possible decentralized user experience. That said, there are other benefits as well.

One of the biggest benefits of EVMs is their interoperability within the Ethereum ecosystem. Ethereum is the most widely used blockchain in the world. Thanks to the Ethereum virtual machine, DApps based on the Ethereum blockchain are able to communicate and interact with one another, allowing for a faster and more seamless user experience.

By using blockchain bridges, interoperability among blockchains can be achieved. Users can freely send assets across EVM networks from one DApp to the next.

Low Barrier to Entry for Ethereum Developers

Now that we’ve gone over what an EVM is and how it works, let’s look at how everything comes together to power EVM crypto and other Ethereum-based projects.

Several DApps and Ethereum projects incentivize users with ERC-20 tokens, which are specifically designed to be easily transferred between addresses and maintain the same value across the network.

ERC-20 tokens are created by smart contracts following defined data structures. This data structure is responsible for naming, distributing and monitoring the token.

These tokens are used for much more than EVM crypto. Nexus Mutual, which provides insurance on smart contracts, utilizes the NXM ERC-20 token to give users the ability to make claims and purchase coverage.

. Although it’s not exactly the most popular example when discussing EVMs, this decentralized video streaming network employs the Livepeer ERC-20 token to incentivize users to supply the network with resources. These are just two of the many DApps that handle ERC-20 tokens.

 (DEXs) enable the exchange of ERC-20 tokens through the deployment of smart contracts. These smart contracts allow users to tap into the liquidity pools of tokens without third-party interference, giving them the title of 

 and several other popular exchanges are actually applications of this decentralized AMM model.

Another widely popular token is the non-fungible ERC-721. Smart contracts with this token are frequently used for minting 

 (NFTs), which are tokens possessing unique value across the Ethereum blockchain.

Unthinkable a few years ago, a piece of code now has the ability to democratize virtual access to art markets. Such gaming projects as 

 also use these tokens for in-game items and collectables.

AdaSwap and Milkomeda are using this collaboration to integrate Ethereum virtual machines into the Cardano ecosystem. There are several other DeFi platforms following Cardano’s lead.

Ultimately, DAOs are entirely governed by individual members who collectively make critical decisions regarding the project. collectively. The rules of a DAO are established by core community members and implemented through smart contracts. Since these are visible, verifiable, and open to public audit, every member of the DAO can understand how the protocol functions at each and every step of the way.

When trying to understand what is an EVMs, it's important to consider both their pros and their cons. Despite its many advantages, EVM technology also comes with certain limitations. For one thing,irstly, using an Ethereum virtual machine requires some level of technical experience. Knowledge of Solidity, Java, and other programming languages is a must.

Secondly, EVMs are infamous for their high gas fees. No matter how smart an EVM may be, it can’t avoid its own popularity and the data congestion that comes with it, resulting in higher transaction fees compared to other chains.

Lastly, the Ethereum virtual machine isn’t entirely decentralized. In fact, about 25 percent of Ethereum nodes are actually running on Amazon Web Services. If AWS were to experience a major outage or discontinue its services, EVMs and the DApps they power would be noticeably affected.

When it comes to Ethereum blockchain and EVMs, we are only at the beginning. In the near future, the speed, complexity, and ability of the Ethereum virtual machine will only increase, in much like the same way as the PCs of the 1990s evolved into the processing powerhouses being used today.

That said, EVMs aren’t perfect. Challenges regarding network throughput and transaction speed continue to be an issue plaguing the system. Currently, these issues are focal points for the Ethereum development community, and solving them is a road map for Ethereum’s continued usage and success.

If Ethereum is to live up to its promise of revolutionizing the way we interact and transact with each other, it will be the result of improvements made to the EVM.

In this article, we’ve traversed the Ethereum virtual machine, explored the execution of smart contracts, and looked at how EVMs execute bytecode. We’ve also discussed gGas, the accounting mechanism for EVMs, and talked about how itthey facilitates transactions and protects Ethereum from DDoS attacks. Ultimately, EVMs are the heart and soul of smart contract deployment and execution. Gaining a deeper understanding of the Ethereum virtual machine is essential a must for anyone looking to develop DApps and dive into our future decentralized world.

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What Is an Ethereum Virtual Machine (EVM)? A Beginner's Guide

From constant outages to heavy VC backing, find out why critics are becoming increasingly concerned with Solana's claims of being decentralized.

Most financial transactions occur based on a centralized model, where a third party has the authority to manage any issues. However, having one party in charge is a double-edged sword, because if that intermediary is compromised, then all client transactions can be impacted. Cryptocurrencies promise to decentralize control of a network so that there’s not one single point of failure. Does this mean that decentralized crypto is immune? And what qualifies as decentralized?

 network suffered another outage — the 12th this year. The blackout shut down the network for four hours and ten minutes, and stopped a potential 975 million transactions from occurring. In a tweet, Anatoly Yakovenko, Solana Labs co-founder, explained the downtime: “As a result of the long nonce instruction, part of the network considered the block invalid, and no consensus could be reached.”

Stability issues on the Solana network caused its value to dip this year, and raised serious questions about the network’s decentralization.

This article examines the issues surrounding the Solana blockchain, and the ways in which its decentralization (or lack thereof) affects the network’s performance.

Blockchain decentralization is a governance system wherein decision-making rights are dispersed across the charge of shareholders or token holders in the majority. It’s designed to keep the network impartial, secure and accessible.

Blockchain decentralization transfers control, decision-making and supervision from a centralized entity, which could be an individual or a group, to a distributed network. The idea of decentralization is to reduce the need for trust among participants, and to lessen their capacity to influence one another to the detriment of the network’s functionality.

Decentralization is what makes the ”permissionless” and “censorship-resistant” qualities of blockchain networks possible. This means that networks can be accessed by all, and anyone can build on them without fear of undue influence or coercion. Decentralization also ensures the security and stability of the network.

The degree to which a blockchain network is decentralized is apparent in the number of distinct groups responsible for validating transactions, the number of developers building on it, and the distribution of the network’s token.

 is a method of measuring the extent of decentralization of a blockchain. It considers the unique properties of blockchain networks to get a more accurate picture of how decentralized a subject network is.

Created in 2017 by Anatoly Yakovenko and Raj Gokal, Solana was designed to push past the throughput limitations of mainstream blockchains while keeping transaction costs low. It boasts a theoretical throughput of 710,000 transactions per second, an impressive speed achieved through the implementation of a unique hybrid proof of history (PoH) consensus mechanism that utilizes a proof of stake (PoS) synchronization engine.

However, for many industry watchers, the Solana network’s lightning-fast speed comes at a cost — namely, centralization. Despite counterclaims, detractors continue to pile up evidence that Solana lacks decent decentralization. This has caused many to wonder if Solana is truly decentralized. To answer this concern, let's examine some of the factors and unique characteristics of the Solana blockchain that lead to doubts about its degree of decentralization.

In PoS networks, security relies on staked tokens which power transaction validation. Stakers are rewarded with transaction fees and voting power. Currently, about 77.7% of all SOL tokens in circulation are staked. Since the amount of SOL allocated to the public is comparatively small, the majority of these staked SOL will belong to insiders.

Invariably, this small group of insiders wields considerable network validation power, a situation that seems to make a case for the lack of decentralization of the Solana Blockchain. 

Critics have also pointed out that the Solana Foundation is the only entity developing core nodes on the blockchain, making them a central control point and reducing the network’s decentralization. Validator nodes are a key component of a blockchain network, and are primarily responsible for reaching consensus, verifying, and updating transactions.

To understand the impact of the validator node concentration on the Solana network, it’s important to consider the number of operational nodes and who owns them. Solana scored a relatively high Nakamato Coefficient of 19. Out of the current 1,161 validators, the top 19 validators control sufficient staked Solana (and therefore voting power) to launch a coordinated attack on the network — if they wanted to.

Validation on the Solana blockchain has a higher barrier to entry, due to expensive hardware requirements for running a validator node. Since few people can afford the thousands of dollars these high-end computers cost, the Solana network inevitably tilts toward centralization.

The Solana network's decentralization is further reduced by the high amount of SOL a validator needs to break even. According to rough estimates, a validator will have to stake about $1 million worth of SOL just to break even. To ease this burden, the Solana Foundation has subsidized validators who meet specific criteria to the tune of 25,000 SOL. However, this further reduces the network’s decentralization, as it means they choose many of the validators, rather than validators choosing to operate nodes by themselves.

With a $314.2 million investment in Solana Labs (through his trading firm Alameda Research), FTX Chief Sam Bankman-Fried (SBF) and a few other VCs have a significant stake in the project. This has led to fears of Solana being a venture capitalist-funded project that sacrifices decentralization and security for transaction speed. In fact, the VCs control virtually half of the staked SOL, creating a single point of control that increases vulnerability and detracts from its claim of decentralization.

As previously mentioned, the latest Solana outage was on June 1, 2022, when the network went down yet again due to a bug in the "durable nonce transaction feature," according to Solana Labs developers. Unfortunately, this isn’t an isolated event, as the network has been hit with a string of outages. This latest one, which lasted for four-and-a-half hours, was the fifth blackout in 2022 alone. 

Solana developers have always given a reason for each outage, ranging from attackers attempting to overload the network with excess transactions to bots running rampant and bugs in the network’s systems. 

But is there a link between Solana's perceived lack of decentralization and these outages? 

While the outages are likely due to unresolved bugs inherent in the network's novel hybrid consensus mechanism, the ease with which node validators restarted the network after the outages exposed an uncomfortable degree of centralization. 

In circumstances similar to Solana’s network outages, another incident inadvertently exposed the soft, centralized underbelly of the Solana ecosystem. 

Trouble started when the whale risked auto-liquidating the 5.7 million SOL deposited as collateral for a $108 million stablecoin loan — in this case, a mix of USDC and Tether — if the slipping SOL price dropped to $22.30. The forced liquidation threatened to wipe out all of the SOL in the liquidity pool and trigger massive liquidations, potentially crashing the Solana network (again). 

Reacting hastily, the protocol unanimously proposed a solution dubbed “SLND1.” This fix sought to hijack the whale’s account, and strategically liquidate the collateral in an orderly manner, in order to avert another Solana meltdown.

However, the Solend team was forced to rescind the decision — in the face of a strident public outcry that questioned the validity of a vote suspiciously concluded within a mere 24 hours. A protocol that could make such a critical, game-changing move without adequate input from all users still has a lot of decentralizing to do. 

Solana is often referred to as the “Ethereum Killer.” Ethereum, however, is still a more popular blockchain than Solana, behind only Bitcoin.

By several indications, Ethereum proves to be more decentralized than Solana. The first is the percentage of Ethereum insiders who own assets, compared to that of Solana.

According to Messari, a mere 15% of Ethereum tokens are allocated to insiders, and the other 5% are for foundations and incentives. So, in total, 80% is available for public sale. Solana has essentially half of its tokens allocated to insiders.

However, just like Solana, Cardano also falls short of being decentralized in its governance. Both blockchains are still heavily influenced by their parent companies — Solana by Solana Labs, and Cardano by IOHK, a Hong Kong software development company. 

One point where Cardano seems to be more decentralized than Solana, however, is in its validation system. Cardano has over 852,000 delegators on its blockchain, while only about 1,811 validator nodes support Solana. Cardano seems to have made more of an effort to create transparency and decentralization.

Ripple is believed to be heavily centralized, as the project's creators hold the majority of XRP. This means they also have a significant amount of decision-making power. Ripple can easily make changes to its blockchain without a system consensus, as the company has complete access to nodes. Ripple also decides when to create new nodes.

Solana’s 1,811 validators number over twelve times the 150 validators on the Ripple blockchain network.

Investing in SOL is easy. With Bybit, one of the fastest-growing crypto exchanges in the world, you can easily buy, sell, trade, stake and hold SOL. To buy Solana, follow these few easy steps:

Among all other cryptocurrencies tagged as "Ethereum Killers," Solana is one challenger that has vastly improved transaction processing times. However, the network has come under fire for being too centralized. Solana’s string of outages may create renewed motivation to continue improving their network.

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Is Solana Decentralized? Outages, VC Ties and More Worries

Heard about the blockchain trilemma? Find out why developers are struggling to solve this issue of balancing scalability, decentralization and security.

The world around us is all about the trade-offs we make to achieve certain results. The blockchain trilemma is no different, so it’s crucial to understand whether the problems associated with blockchains can ever be solved. Developers are pouring time and energy into solving this problem, and we’ll look at how blockchain scalability, security and decentralization can work together. These three features are fundamental to how blockchains function, with a growing acknowledgment that you can only get two out of the three. That means every blockchain must sacrifice something to work as efficiently as possible.

The blockchain trilemma is the concept that decentralization, security and scalability can’t all be represented in one blockchain.

An Example of the Blockchain Trilemma: Bitcoin’s Scalability

The issue that Vitalik Buterin was talking about is whether or not it’s possible to achieve all three of these features in a single network. Many developers have concluded that achieving all three features is impossible, and that it comes down to making do with what 

 possible with the current technology — and figuring out how to make the trade-off in a real-world environment. As much as each project tries to optimize their network, there will be some shortcomings with each blockchain design. Thus, the key for developers is to figure out how much of each characteristic they’re willing to sacrifice in order to achieve optimal performance.

However, because of this, they control everything to get you transaction times that are shorter than a second. On top of that, the transaction fees are relatively low when compared to many other networks. Because of this, many people are moving toward a cashless society that will remove the need to carry physical money around.

As you can see, blockchain decentralization negatively impacts a network’s security and scalability. Blockchain decentralization is crucial — because it requires that you sacrifice one other feature to have the most optimal network possible. Ultimately, blockchain decentralization is better when one entity or individual doesn’t control the entire network. However, blockchain scalability or security are sacrificed when prioritizing blockchain decentralization.

Unfortunately, blockchain scalability is a significant problem that has kept many cryptocurrencies from being used on a mass scale. In order for a blockchain to be practical, it needs to progress to a stage where it's subjected to thousands of transaction requests and is able to process them rapidly.

Ideally, projects would want their blockchain to be able to scale to millions of 

 (TPS). This is one of the many reasons why Visa and MasterCard are used all over the world. After all, no one would use these cards if you needed to wait 20 minutes or more for your transaction to be processed — and no store would want to use this network if they had lengthy lines because it took so long to process transactions. Blockchain scalability needs to be built in because developers need to figure out how to make it work for specific use cases, rather than just looking at 

Blockchain security is the third feature many networks might choose to relax when it comes to the blockchain trilemma. Good blockchain security means that everything should be robust so that no one can take over the network — for example, capitalizing on network vulnerabilities to insert transactions into a network. 

The major downside to maintaining blockchain security is that it takes a lot of processor power to achieve it. This might be a problem if blockchain decentralization goes into effect as well. When you combine this necessity with the realities of blockchain decentralization and scalability, it means you have to expand processing power tremendously to achieve a small improvement in your TPS rating. These are the things that blockchain developers must balance out when trying to build a network. They have to figure out which one of the three they want to sacrifice.

With blockchain decentralization, another issue is consensus. What is the correct transaction for each ledger? When you’re writing a transaction into the blockchain ledger, how do you ensure that the transaction gets correctly updated to all of the nodes? This takes a lot of processing power — which is why it’s important to understand how to balance security with other features inside a blockchain network. Blockchain security is only going to become more important as its utility increases. An example of security gone wrong is with blockchains that use smart contracts.

The general idea with blockchain security is that it works in retrograde to blockchain scalability. Blockchain security requires that you use additional processing power to ensure that no one exploits the network. However, the major problem with this is that, as a consequence, there is now less power to process transactions. Developers have to decide between processing more transactions or maintaining enhanced security. On top of that, the more decentralized a network is, the longer it’s going to take to reach consensus — making it even more difficult to achieve ideal simultaneous blockchain decentralization and security. Many people are currently attempting to figure out how to make both of these concepts work correctly, without major downsides to the network.

An example of a secure network is Visa, mentioned above. It offers a credit card processing network that delivers millions of TPS. Despite this, blockchain security is never an issue with them. We almost never hear about anything being exploited. However, when something does happen, it’s usually because the vendor has done something prohibited. It’s never the credit card processing company itself with problem that’s been exploited. 

Most blockchains are quite secure, and security breaches aren’t an ongoing problem for most networks. However, as mentioned, security comes at the price of scalability. This has many people thinking of various ways they can improve security and transaction processing capability — without destroying the essence of the network.

Different Approaches to the Blockchain Trilemma

In addition, Avalanche’s minimal hardware requirements are impressive. One can start as a validator with inexpensive hardware for less than 1/10th the price of the hardware needed to become a validator on the Solana network.

It’s clear that being a validator is important for both blockchain decentralization and scalability. However, not many people are incentivized to become validators. Doing so is often too expensive or complicated to make it work, limiting its benefits to just a few

Potential Solutions to the Blockchain Trilemma

There are a few potential solutions to the blockchain trilemma, to be implemented independently. Many developers are also figuring out how to achieve the blockchain trilemma on each part of a network.

Polkadot’s Relay Chain allows multiple blockchain networks to connect to each other quite easily because they can connect to plenty of networks without the downsides inherent to the blockchain trilemma. Parachains run in parallel to the Polkadot blockchain. They use the Polkadot Relay Chain to achieve maximum scalability, security and governance.

Sharding splits up the blockchain and separates it across multiple validators. It’s a risky way of doing things because of the theoretical possibility that all validators holding a certain shard might go down. In this case, the entire piece of the blockchain would be lost. There are several algorithms to prevent this from occurring, which is one of many ways to improve the process Ethereum offers shard chains as a way of improving scalability. This method splits the entire blockchain horizontally, putting the load across multiple servers and making it possible for network participation and processing power to increase geometrically.

A nested blockchain exists within another blockchain. Layer 1 blockchains delegate processing to a nested blockchain, meaning that custom processing solutions can be created relatively easily. This is one of the best and easiest ways to solve the blockchain trilemma without too much difficulty. The biggest example of this is Ethereum Plasma, which uses a separate blockchain that’s anchored to the main chain, capable of offering proof of fraud to arbitrate disputes.

A state channel essentially has delegated transaction processing and capacity. Its nodes don’t require validation, meaning that it’s like an adjacent resource that does what it needs. The Layer 1 network only requires that the final state of the channel be recorded into the blockchain.

A sidechain is essentially a separate blockchain that connects to the main blockchain by using a two-way peg. It increases the existing blockchain’s interoperability and processing power. For example, Bitcoin’s network can use sidechains to process transactions even faster. This is one of the many ways people are getting more performance out of Bitcoin, even when technically it shouldn’t be possible.

There is no one solution when looking at how the blockchain trilemma can be solved. It’s theoretically impossible to achieve the Holy Grail. The best that we can do thus far is to optimize each blockchain as much as possible to achieve its stated goal. We might experience a future with virtually infinite computing power and geometrically faster network transfer speeds. In that environment, the blockchain trilemma could be solved relatively easily. It would stop being a problem because transaction speeds would be propelled “to the moon.”

The blockchain trilemma is currently a major problem for most developers. However, like anything else, once we understand the nature of the problem, we have a much better chance of finding a solution to it. Many developers are working on the complexities of the blockchain trilemma, and they’re quite optimistic — so we should be too.

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The Blockchain Trilemma: Can It Ever Be Solved?

Although Ethereum has been running on the Proof of Work (PoW) mechanism so far, things are set to change in 2022. In this article, we detail Ethereum's upcoming switch to Proof of Stake (PoS): what the blockchain's current issues are, why it's switching to PoS and more.

With new tokens and platforms being developed all the time, an apt word to describe the crypto industry would probably be “dynamic.” While new cryptocurrencies pull out all the stops to break into the market, well-established cryptocurrencies are faced with the challenge of maintaining their rankings amid fierce competition. One way to do so is to constantly look at their offerings, and adjust/reinvent themselves in tune with consumer needs.

Ether, the second most popular cryptocurrency after Bitcoin, has enjoyed a much higher rate of adoption and growth than the latter in merely the first five years of its existence. Still, the platform is plagued by a number of issues such as high gas fees and slow transaction speeds, and its competitors are catching up 

. Change is imminent, and Ethereum is stepping things up — with big changes listed in its road map. 

This article will explain everything you need to know about Ethereum's forthcoming upgrade, with information about what Ethereum is, why the Ethereum blockchain is switching to the 

 (PoS) consensus, and how the move will help solve the issues currently faced by the network.

Ethereum is a community-run technology powering the Ether cryptocurrency (ETH) and thousands of decentralized applications (DApps).

The network allows users to send crypto to anyone by paying a small fee. Ethereum also powers various applications that can be used by everyone, but can't be taken down by anyone.

Known as the world's programmable blockchain, Ethereum has built on Bitcoin's innovation. It comes with a number of significant differences and improvements.

Both Ethereum and Bitcoin allow you to use digital money without intervention by payment providers or banks. However, Ethereum is programmable, and can therefore be used to send many digital assets, including Bitcoin.

Ethereum is designed for more than payments — it’s a marketplace of financial services, apps and games that cannot censor you or steal your data.

 network, which is a decentralized, distributed public ledger that verifies and records all transactions. The Ethereum network is not operated or managed by a centralized entity — it’s managed by all of the distributed ledger holders. All participants have access to a copy of the Ethereum ledger, which includes details about all previous transactions.

 to verify transactions and keep the network secure. People use computers to solve complex mathematical equations (also referred to as 

), whereby each transaction on the network is confirmed, and new blocks can be added to the 

 at the heart of the system. Miners are rewarded with crypto tokens — e.g., ETH for Ethereum participants.

Like Bitcoin, ETH can be used to purchase and sell goods and services. However, Ethereum is unique in the sense that users can build their own applications that run on the Ethereum blockchain, like how software runs on a computer. These Ethereum-based applications can store and transfer personal data and handle complex financial transactions.

Proof of stake, or PoS, is a crypto consensus mechanism that helps process transactions, validate entries on the blockchain, and create new blocks while securing the blockchain.

PoS reduces the computational work required to verify blocks and transactions that keep the blockchain and its cryptocurrency secure. It changes how blocks are verified using the coin owners' machines. The owners put their coins up as collateral for the opportunity to validate blocks. 

 their coins are referred to as "validators." Validators are then chosen at random to 

 or validate a block, rather than the consensus being based on a competition-style mechanism such as proof of work (

If a coin owner wants to become a validator, they must first stake a specific amount of coins. Ethereum users must stake 32 ETH to become a validator. The blocks are simultaneously validated by more than one validator. After the block has been validated by a specific number of validators, it is finalized and closed.

Different PoS mechanisms use different methods for block validation. When it transitions to PoS, Ethereum will use 

 for transaction submissions. A validator will verify transactions and add them to a shard block, which requires attestation by at least 128 validators. Once the shards are validated and the block created, at least two-thirds of the validator pool needs to agree that the transaction is valid for the block to be closed.

Why Is Ethereum Switching to Proof of Stake?

 projects, the Ethereum network has grown tremendously in the last year.

So far, Ethereum has been the preferred network for developers working on NFT or DeFi projects, with over 200 DeFi projects currently hosted on the its blockchain. This increased adoption has led to a substantial rise in the number of transactions made on the Ethereum network. On the flipside, there’s also been a noticeable increase in the number of problems encountered on the network.

With more transactions occurring, miners have had to expend more computational power for the verification of transactions. This higher computational power consumes more energy, to the point where users have begun to evaluate the network’s 

At present, Ethereum uses 113 terawatt-hours (

 is equivalent to what the entire population of the Netherlands uses in a year. A single Ethereum transaction can consume the same amount of power as an average U.S. household in about a week.

This high energy consumption has become a significant concern among the scientific community, which has started to warn Ethereum developers about the negative impact of the network's

 on the environment. Since then, the PoW consensus mechanism has faced scrutiny by global lawmakers. In Sept. 2021, 

, partially over mounting environmental concerns.

The Ethereum network is also quite slow, with a current rate of only 15 transactions per second (

) — significantly slower than competitors like 

, whose TPS rates are in the hundreds and thousands, respectively. Another issue faced by Ethereum is its

 (transaction costs). Users pay exorbitant fees to have their transactions verified with the current PoW mechanism.

PoS: The Solution to Ethereum's Current Problems

Switching to PoS will decrease the amount of computing power required to process transactions, making Ethereum more environmentally sustainable. However, lower energy consumption isn’t the only benefit to be effected by 

After implementing the PoS consensus mechanism, Ethereum 2.0 will ostensibly use 99 percent less energy, allowing the network to scale and potentially perform as many as 100,000 TPS.

When Is Ethereum Switching to Proof of Stake?

Ethereum plans on transitioning its entire network to the PoS mechanism in a dramatic event called 

Ethereum's PoS approach has already been tested on the 

, launched on Dec. 1, 2020. As of March 2022, 9.5 million ETH ($37 billion in current value) has already been staked.

There are still two phases to go, but the full release of Ethereum 2.0 is expected in Q2 of this year (2022).

Proof of Stake (PoS) vs. Proof of Work (PoW)

With PoW, the probability of mining a block is determined competitively and is based on the size of the stake the person holds (i.e., the number of coins they possess).

With PoS, randomly selected miners are selected to validate transactions. The amount of computational work done by miners determines their probability of mining a block.

On a PoS blockchain, the block creator is selected by an algorithm based on users' stakes, rather than being determined by competition.

With PoS, the validator collects network transaction fees as a reward for completing a block.

PoS miners, on the other hand, can easily work with a standard server-grade unit. The only prerequisites they need to meet are securing a stake and building a reputation.

However, with PoS, it’s practically impossible for hackers to add a malicious block — as they would have to own 51% of all the cryptocurrency on the network to do so.

PoS systems, on the other hand, are less proven but much more cost- and energy-efficient than PoW systems.

 on March 16, 2022. In this decision’s direct aftermath, the value of ETH and a number of other cryptocurrencies increased. In general, rising interest rates hurt growth stocks. However, in this case, the declines had been priced in since January, so the market saw the rising rates as a good way to reduce inflation in the U.S. economy.

However, Ethereum faces a direct threat from faster and more efficient competitors eating into its market share. The network plans to address this challenge with Ethereum 2.0, which replaces the current PoW consensus mechanism with PoS. This change in approach will make the network faster, increase transaction capacity, reduce costs, boost security and decrease energy use, bridging the gap between Ethereum and key rivals like 

The Ethereum 2.0 upgrade is scheduled to conclude in 2023. According to analysts at

, ETH has the potential to cross $3,200 by end 2022, a +27.90% increase on its current price of $2,921 per coin.

It’s reasonable to presume the upgrade will boost the Ethereum network and help maintain its dominance in the DApp space. Given its branding, market dominance and planned upgrades to its infrastructure, Ethereum is without a doubt a solid long-term investment option. 

(Editor’s note: The views expressed above must not be considered investment advice. There is a lot happening right now, and 

. Please be cautious, conduct thorough research, and invest only what you can reasonably stand to lose.)

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