Lefteris Karapetsas: Raiden Can Solve Ethereum’s Scalability Problem and Provide a Usable UX
Blockchain’s scalability problem has become the industry’s central focus. The core framework has been laid out and a wide range of use cases are being developed, but without scalability solutions, the technology will hit a brick wall. At present, scale means that fuel usage is sky-high, processing times for transactions are lengthy, and fees are problematically large.
Without getting ahead of ourselves, it is fair to say that the Raiden Network has the potential to solve Ethereum’s scalability issues on its behalf. The organisation describes its protocol as a means for “fast, cheap, scalable token transfers for Ethereum.”
This is hardly an original goal, but there is a general consensus that Raiden is one of the most promising solutions being developed. In essence, Raiden takes transactions off of the main chain while maintaining the security and guarantees as expected from the blockchain system.
“If we are to see widespread, effective adoption of blockchain technology, then it must be able to handle 100,000,000 transactions per second”
According to a video from Raiden’s website, if we are to see widespread, effective adoption of blockchain technology, then it must be able to handle 100,000,000 transactions per second. This is a significant jump from the 10-15 transactions per second it is currently capable of.
Lefteris Karapetsas is a developer team lead at the Raiden Network, having previously worked for two years on the development team at Ethereum itself. It put him in a good position to develop Raiden on top of the Ethereum network, and has helped Lefteris develop Ethereum’s equivalent of Bitcoin’s Lightning Network.
We spoke with Lefteris following his presentation at our master workshop on off-chain solutions in Berlin earlier this summer. We heard his opinion on the current state of the industry at large, but first we asked him about his current position.
Raiden is Leading the Way
“I am the developer team lead for the Raiden network,” he says. “Essentially, we are based all over the world – some of us are here in Berlin. We are building the Raiden network, which is a payment channel network for Ethereum.”
If Raiden can create a genuinely accessible UX for blockchain technology, it will enter a surprisingly exclusive club. Very few of the products currently available have attractive, easy-to-navigate interfaces - a problem reminiscent of the Internet itself during the early years of its development.
You can forgive engineers for putting UX on the backburner for now, though, with scalability top of everyone’s list. How does Lefteris believe we can surmount the problem?
“Payment channels… plasma, and perhaps sharding (splitting the state between multiple side chains)... I think, [is] the key to scalability”
“Essentially, that would be a combination of what we are doing,” he says. “Payment channels, along with some kind of implementation of plasma, and perhaps sharding (splitting the state between multiple side chains). So a combination of those is, I think, the key to scalability in Ethereum and possibly in the wider blockchain world.”
Put Your Code Where Your Mouth Is
Raiden wants to play a large role in Ethereum’s scalability going forward and made its code public to allow other developers to interact with it. We asked Lefteris why the team took the decision to uncover its code given the value that a lot of organisations place on secrecy.
“I would only have worked on public source code… especially when it’s about handling people’s money. They have to know how the system works… It has to be auditable”
“That was from the very beginning, before I even joined,” Lefteris says. “I would only have worked on public source code. It is my very firm belief that you have to put your code where your mouth is, especially when it’s about handling people’s money. They have to know how the system works – they have to actually see that you are not lying. It has to be auditable.”
The outside influence on blockchain’s development is increasing, with major financial institutions and governments investing heavily in exploring the tech while policy-makers scramble to make sense of it all. There is, naturally, a great deal of discussion about how active a role government should have in the process of bringing blockchain to market, but for Lefteris it’s no conflict at all.
“I think that the government has no role in interfering with the development of blockchain, but they can definitely use it for governance”
“I think that the government has no role in interfering with the development of blockchain, but they can definitely use it for governance,” he says. “What we are trying to do with blockchain governance could also be taken into account for actually governing countries.”
Blockchain for the Masses
Many people believe that to see mass adoption, the use of blockchain technology will have to be seamless to the point where users may even be unaware of the fact it is underpinning products. But will the general public, outside of the tech community and the early adopters, actively engage with blockchain at any point soon?
“That’s a good question, because actually my family has started using a bit of normal blockchain payments. I would say only when we solve the scalability problem will we be able to see much more of the general public using blockchain. Else we just don’t have the transaction capacity – 12 transactions per second is too little compared to the millions on VISA. So, we need to reach the transaction capacity of VISA.”
We can assume that Lefteris’ family are ahead of the curve and qualify very much as early adopters, but public interest in the industry is swelling. Near the end of 2017, Coinbase reached more than 10 million users worldwide and became the most downloaded app on the US Apple Store, according to Forbes.
How Will Banks Respond?
This interest extends to major financial institutions. Banks are being encouraged by industry leaders to see blockchain as an opportunity to modernise rather than an existential threat. Rather than trying to shut down the emerging tech, then, they are investing heavily into it. Santander estimates that blockchain could cut banks’ infrastructure costs by up to $20 billion each year by 2022.
“Santander estimates that blockchain could cut banks’ infrastructure costs by up to $20 billion each year by 2022”
We asked Lefteris how he sees banks navigating the growth of cryptocurrencies. “This has happened quite a bit already,” he says. “Many banks have made a blockchain consortium – I3. They’ve made a lot of stats on how they can utilise the technology, so I believe that they can definitely benefit from utilising blockchain technology for their own infrastructures. Also funding – they have a lot of funding for research into blockchain technology.”
The debate over whether to attempt to scale on-chain, as proponents of cryptocurrencies like Bitcoin Cash advocate for, or to move transactions off-chain, as the Lightning and Raiden Networks hope to achieve, rages on. Only time will tell who wins out and that winner will have the market capitalisation to show for it.
Our upcoming workshop on layer 1 solutions will focus on the viability of on-chain solutions long-term. Join us in Amsterdam this November 16 - 18 for a deep dive into sharding and the potential on-chain remedies to blockchain’s scaling woes.
Illustrations by Kseniya Forbender
To contact the editor responsible for this story:
Margarita Khartanovich at [email protected]