What is Plasma, where is it going, and when?
Last month, my colleague Ben Edgington wrote an article called “State of Ethereum Protocol #1”. He dives into the past and present progress of sharding and general changes in the base protocol. In this post, I will discuss the same information in regards to Plasma to provide readers with a better sense of its progress and what’s to come.Introduction to Plasma
We often talk about layer 1 and layer 2 solutions for Ethereum. Layer 1 solutions — as Ben talked about in his post — are built into the core infrastructure of the blockchain itself. Layer 2 solutions — one of which I will be talking about — are built on top of the blockchain without changing any rules of the blockchain.
Plasma is a layer 2 technology built on top of the Ethereum protocol using a combination of smart contracts and cryptographic verification. Together, these enable fast and cheap transactions by offloading these transactions off the main Ethereum blockchain into a “child” chain. These child chains periodically report back to the main chain and use the main chain to settle any disputes (almost like a higher court). The main chain will use mathematically verifiable methods to handle disputes and reward the correct party with their funds.
A fundamental criteria for Plasma is security: your funds will always be retrievable by you and not anyone else (companies/hackers cannot steal your funds). Some applications of Plasma include decentralized exchanges (peer to peer exchange of assets), faster payments enabling a richer commerce ecosystem, and applications that require transfer of assets in a many-to-many model.
Vitalik Buterin recently said it is a “bad idea” to build (sophisticated) features into the base layer of the blockchain. He writes, “…it would create a high level of governance overhead as the platform would have to continually discuss, implement and coordinate newly discovered t...