Daily transactions increased from approximately 40K to 240K from Q2 2016 to Q2 2017 , which represents a 500% year-over-year growth.Moreover, just in the past month it reached a peak of over 440K transactions per day!median gas used by smart contract calls is 50K , which means roughly ~7 transactions per second).Combined with the fact that the number of transactions on the Ethereum network is growing at a significant pace, you can see how this would become a problem.Unfortunately, this is not the actual throughput due to Ethereum’s “gas limit”, which is currently around 6.7 million gas on average for each block .Quick “gas” primer in case the measurement is new to you: in Ethereum, gas is a measure of computational effort, and each operation is assigned a fixed amount of gas (for example, getting the balance of an account costs 400 gas, creating a contract costs 32,000 gas, sending a transaction costs 21,000 gas, etc.).In other words, as the size of the blockchain grows, the requirements for storage, bandwidth, and compute power required by fully participating in the network increases.
My excitement about the potential of blockchain technology has been building ever since.
Decentralized digital currency, once just a far-fetched goal, is finally making inroads into the mainstream.
While that’s exciting on its own merit, I’m personally most excited about the potential for decentralized applications.
While a decentralization consensus mechanism offers some critical benefits, such as fault tolerance, a strong guarantee of security, political neutrality, and authenticity, it comes at the cost of scalability.
The number of transactions the blockchain can process can never exceed that of a single node that is participating in the network.