
Explore the need for scalable programmable blockchains as Ethereum faces low throughput and gas fees; learn about layer one and layer two scaling solutions, including sharding, sidechains, plasma, and rollups.
Target techies and analysts with a technology background to explore blockchain scaling solutions within this course.
Explore the blockchain scalability trilemma, learn blockchain basics and web3, and examine scaling classifications from sharding to rollups, including implementations, risks, data availability, and a framework to evaluate solutions.
Explore three blockchain classes from the trilemma: decentralized and secure (Bitcoin, Ethereum), scalable and secure (delegated proof-of-stake like EOS and Tron), and decentralized and scalable (multi-chain ecosystems with cross-chain communication).
Explore the blockchain scalability trilemma, balancing scalability, decentralization, and security in decentralized systems. Learn how full-node participation and a majority prevent consensus hijacking and enable faster finality and higher tps.
Describe blockchain as a distributed database with encrypted copies on multiple nodes, accessible even if some go offline, and forming a state machine with identical node states.
Explore how clients verify transactions and how nodes form the blockchain network, detailing Ethereum full nodes that store data and validate blocks, light nodes that download headers, and archive nodes.
Batch transactions to keep all nodes' histories aligned, with Bitcoin 10 minutes and Ethereum 14–15 seconds per block; headers hash the previous block, while bodies store encrypted transactions.
Explore states and state transitions in blockchain systems, defining state as remembered information at a moment and transitions as discontinuous changes when a new block is accepted.
Learn how blocks use a Merkle tree and Merkle root to hash and verify that all nodes store same transaction data, with Bitcoin's Merkle tree and Patricia Merkle tree variants.
Explore how blockchain consensus validates transactions before adding blocks and how mechanisms like proof of work and proof of stake secure networks against 51% attacks.
Explore blockchain bridges that connect ecosystems and enable cross-chain asset and information transfer, while contrasting trusted centralized bridges with decentralized, trustless, non-custodial bridges built on smart contracts.
Gas fees compensate miners and validators for block creation; on Ethereum, the fee equals gas used times the gas price in gwei, varying with demand and transaction complexity.
Smart contracts are self-executing programs on blockchain networks that act as accounts, can hold crypto assets, and execute tasks as programmed.
explore blockchain layers and their purpose, from hardware/infrastructure to data, network, consensus security, and the application and presentation layer, including smart contracts, APIs, and the execution layer.
Analyze how blockchain scaling aims for faster finality and higher TPS by letting some nodes skip processing all transactions and by bundling transactions outside the blockchain before submitting them.
Explore layer one and layer two scaling in blockchain, comparing on-chain capacity increases with off-chain parallel lines, and discuss decentralization trade-offs of higher computing power.
Explore sharding as a layer-1 on-chain scaling solution that divides transactions across shards, increases storage and transaction processing, and maintains security as enough nodes verify transactions to address scaling trilemma.
Sidechains are independent blockchains running parallel to the main chain and connected via two-way bridges, using their own consensus and block parameters.
Plasma chains are independent blockchains with fraud proofs and non-custodial exits to the main chain, mainly supporting token transfers rather than general computations, with examples like OMG Network and Gluon.
Explore layer two scaling solutions that rely on the main network for security, focusing on rollups that batch transactions and submit aggregates, including optimistic and zero-knowledge types.
Explore optimistic rollups and the dispute time delay that lets nodes prove invalid batches, with deposits incentivizing honesty and proofs reverting the smart contract to the last valid rollup state.
Explore zero knowledge rollups and validity proofs, including snarks and starts, that bundle off-chain transfers and post verifiable proofs on-chain. Two on-chain merkle trees store accounts and balances.
Compare optimistic rollups with zcash rollups: optimistic rollups are simpler but incur delays due to proofs and disputes; zk rollups offer faster withdrawals but are complex to build and compute.
As per the Chainalysis State of Web3 Report June 2022 Report, cryptocurrencies with the smart contract functionality that powers DeFi and web3 now account for 45% of all blockchain transactions. This means growing demand for programmable blockchains. Ethereum is still leading but there is a multitude of problems with Ethereum. Apart from low throughput at just around 15 transactions per second compared to 1700 transactions per second for the visa network, a high gas fee creates a major bottleneck for Ethereum to drive mass adoption of web3 tech. As the gas fee does not depend on transaction value, smaller transactions are especially expensive on Ethereum as shown by the mentioned report.
Now, many emerging fields in web3 such as gaming involve frequent microtransactions creating an urgent need for blockchains that can handle higher transaction throughput at a low cost and offer security comparable to ethereum.
This brings us to scaling solutions. Various Layer-1 and Layer-2 scaling solutions are being built to keep pace with the rapidly growing web3 ecosystem. These scaling solutions come in various forms and use a multitude of technologies.
Understanding scaling solutions can be challenging because for that we need to understand the fundamental working of blockchains.
This course wants to help you understand different types of scaling solutions - from sidechain and plasma chains to rollups and shards.
So, let us get started.
As these topics can be considerably esoteric….I request you to go slow with the course material and understand one topic at a time before moving to the next one. I have added many reading material links to the videos. Please read all of them.