Transaction Time

Ethereum’s current transaction rate has an upper bound of 14 transactions per second. The average is about half that. I believe that speeds of at least 100,000 transactions/second should be the minimum required of anything looking for global adoption, and this is probably still much too conservative, considering the possibility of machine-to-machine microtransactions exponentially increasing the throughput required of the network.

Ethereum’s current options for scaling include Sharding, Raiden, and Plasma, three different methods of subdividing the work of processing transactions of the Ethereum Network.

Sharding: The Ethereum network is broken into groups and the work is distributed. This isn’t something you can invest in, other than simply investing in Ethereum.

Raiden: Raiden uses State-Channel technology to process transactions without the main Ethereum chain having to manually authorize the transactions. This is particularly useful for IoT and Machine-Machine transactions, and recently, a simplified version of this scaling solution called µRaiden was activated on the Ethereum Mainnet.

Plasma: The ERC-20 token OMG is currently undergoing development of a plasma-enabled exchange known as the OMG network, and according to the Omise Go team, the decentralized exchange “can support all the world’s currencies plus crypto for >1B users simultaneously.” This technology relies on Sharding, which cannot be implemented until Ethereum’s “Casper” update is live.

Now that you’ve learned a bit about the three scaling options, let’s figure out how you can make money! Options one and three, sharding and plasma, will work on any ERC-20 token. Therefore the way to make money on these is to invest in things like Omise Go and Ethereum.

The Raiden solution exists as the asset “Raiden Network”. Raiden may have fallen out of the top 100 market cap assets, and perhaps IOTA is more promising for machine-machine transactions… but if ERC-20 remains the de-facto standard, there’s a chance we’ll see a comeback.