Plasma May Ethereum To Billions Of Transactions PerSecond

A working draft of Plasma: Scalable Autonomous Smart Contracts, whitepaper by Ethereum founder Vitalik Buterin and co-author of the Lightning Network whitepaper Joseph Poon, was released August 10, 2017. The paper lays out a plan to massively scale forward the number of transactions per second that the Ethereum blockchain is capable of processing.

The proposed Plasma framework may enable the Ethereum blockchain (or any other blockchain it integrates with) to advance dramatically. A number of features come together to make this possible, and the protocol itself draws upon the integrations of tools such as proof-of-stake (PoS), Nakamoto Consensus (widely referred to as proof-of-work), a cluster scaling solution called MapReduce, and an incentivized structure to deter byzantine behavior by participants. These attributes coalesce in a manner which allows smart contracts, or executable distributed code contracts, to become scalable. Fraud proofs are used to manage data that is recorded for validation purposes, reducing the load on the network. As per the draft, "As only merkleized commitments are broadcast periodically to the root blockchain (i.e. Ethereum) during non-faulty states, this can allow for incredibly scalable, low-cost transactions and computation. Plasma enables persistently operating decentralized applications at high scale."

Detailed analysis of some of these separate features and how they interplay can be found in the following paragraphs.

Multiparty Computation Meets Scalability

Adding blocks to the blockchain requires total validation from participants, generally speaking. Some scalability efforts, such as in the case of Lightning Network, make use of an assert / challenge agreement wherein prior to validation, there is an enforced dispute period. If the state is found incorrect during the dispute, the validating party claiming it to be correct is penalized by the blockchain. The mechanism encourages participants to only enforce penalties in the case that a faulty or incorrect state is asserted.

To get around issues of trust that are involved in off-chain multiparty commitments, Buterin and Poon seek to "design a system whereby computation can occur off-blockchain but ultimately [would be] enforceable on-chain." In so doing, the researchers said the method "is scalable to billions of computations per second with minimal on-chain updates." Proof-of-stake validators, incentivized toward good behavior by way of enforceable fraud proofs, enable computations and eliminate the threat of them being halted by a single actor.

According to the paper, Plasma will work similarly to the Lightning Network that Poon helped create, in that it is a series of executable distributed code contracts (EDCCs) running atop an existing blockchain. This ensures enforcement while simultaneously holding funds in a contract state with a net settlement / withdrawal that is scheduled to take place at a specified later time.

The Plasma Protocol

Plasma is about economic incentives that autonomously govern chain operations absent of active state transition management from the contract creator; in such a way, nodes themselves are incentivized to operate the chain. Measures to create more scalability see funds minimized to a single bit on a bitmap which allows many transactions to be represented together. Coupled with MapReduce frameworks, EDCC enforceable and scalable computation can be achieved.

An externalized party can hold funds and perform computations on behalf of another while Plasma runs on top of the existing blockchain. This eliminates the need to generate on-chain transactions for every state update by leveraging coalesced state updates that are comprised of the bitmaps in which the transactions are composed.

The above image displays how the root chain, in this case, an Ethereum-based root, interacts with the Plasma contracts atop it, only performing computations in the event that proof-of-fraud is established. Ethereum would see Plasma built on Ethereum Virtual Machine EDCCs, while processing small commitments representative of large amounts of computation and ledger entries.

Five components come together to make this work, according to Buterin and Poon:

1) An incentive layer allows computing of contracts to be efficient.

2) A framework for the arranging of child chains in a tree format to maximize low-cost efficiency and net-settlement of transactions.

3) Integration of a MapReduce computing framework for constructing fraud proofs-of-state transitions within nested chains to enable compatibility with the tree structure, while reframing the state transitions for scalability.

4) A consensus mechanism, dependent upon the root blockchain, that attempts to replicate the Nakamoto consensus incentive (proof-of-work).

5) A bitmap-UTXO commitment structure that ensures accurate state transitions off the root blockchain while minimizing mass-exit costs. Allowing for withdrawals when a block is unavailable, or if other Byzantine behavior prevents exits from the chain, is one of the key design points in Plasma's operation.

The Plasma Blockchain; Externalized Multiparty Channels

Buterin and Poon are calling this propsed framework for multiparty off-chain channels a Plasma blockchain.

The figure above shows how the Plasma chain, a chain within a blockchain, uses bonded fraud proofs as an enforcement mechanism. Plasma doesn't disclose the contents of the blockchain to Ethereum (the root chain in this instance), rather, block-header hashes are submitted and, in the event there is proof of fraud, the block is rolled back and the block creator is penalized. This can be represented in a single hash accompanied by small amounts of associated data. In the example, Alice's balance is maintained on the Plasma chain and not the Ethereum (root) chain. The grayed out blocks above represent old ones, and the black are the most recent blocks.

The next example shows how Plasma handles block withholding.

Alice wants to withdrawal her funds but validation is barred due to a withholding attack. The red block in the figure is withheld, so Alice must exit by broadcasting a proof-of-funds on the Ethereum (root) blockchain; her withdrawal will be processed post delay, thus allowing for any disputes.

Plasma Trees

The above figure demonstrates the various branches of Plasma. Block commitments travel through the hierarchy and commitments go to the root chain.

Plasma's mechanism is similar to a judicial hierarchy, according to the whitepaper. "We create a system of higher and lower courts to maximize availability and minimize cost in non-Byzantine states."

As shown in the above figure, in the event of Byzantine failure, commitments can be broadcast to the next block in the hierarchy, or parent block; participants have the option to migrate to another block in this case.

A Road To Proof-Of-Stake

Buterin and Poon propose a PoS method "whereby a single party can enforce state with a set of validators, often in a proof-of-stake framework requiring either ETH bonding, or bonding in a token (e.g. ERC-20)." An on-chain EDCC enforces the consensus mechanism for this method.

Buterin and Poon said they can mitigate block-withholding attacks imposed by majority cartels by allowing stakeholders to publish on the root blockchain or parent Plasma chain that contains a hash of the new block. As per the whitepaper:

"Validators only build upon blocks which they have fully validated. They can build upon blocks in parallel (to encourage maximum information sharing). We [created] incentives for validators to represent the past 100 blocks to match the current staker ratio (i.e. if one stakes 3 percent of the coins, they should be 3 percent of the past 100 blocks), by rewarding more transaction fees to be paid out to accurate representation. Excess fees (due to suboptimal behavior by stakers) goes to a pool to pay out fees in the future. A commitment exists in every block which includes data from the past 100 blocks (with a nonce). The correct chain tip is the chain with summed weight of the highest fees. After a period of time, the blocks are finalized."

According to both Buterin and Poon, this encourages validators to participate while replicating the 51 percent attack assumptions present in the proof-of-work consensus model. If the chain is attacked by block withholding or other Byzantine behavior, non-Byzantine participants are able to migrate en masse via a compact withdrawal on the parent or root blockchain. Such a mass exit will likely devalue any tokens bonded to the highest parent Plasma chain, disincentivizing an attack.

MapReduce Functionality

The MapReduce formation is integral to massive scalability across a multitude of active nodes. Transactions represented as bits on a bitmap can be enforced via fraud proofs in a merkleized state, significantly reducing the on-chain load. Furthermore, zero-knowledge-proof-of-stake transitions (with zk-SNARKS) are compatible with this method.

Buterin and Poon explain that the integration of MapReduce allows for "high-scale computation, with time or speed tradeoffs. These tradeoffs produce a network where nodes assert computation and participants are responsible for verifying them. This does not produce a system whereby one can completely outsource computation without trust, it enables the ability to compress computation into bonded proofs. These bonded proofs encourage participants to only attest to things honestly."

This plays off the assumption that "if no one is watching/enforcing the computation, it’s presumed to be correct, or it simply doesn’t matter what the result may be." Scaling becomes possible because participants will monitor the chains they are economically impacted by, rather than every chain; one watches the chain wherein they wish to reinforce proper behavior and punish malicious actors. Thus, behavior in other Plasma chains is capable of being conglomerated in order to minimize the state of computation affecting each chain.

The figure above displays how economic activity or computation that’s not necessary to enforce is grayed out relative to the processes of the bolded blue chain, which consists of chains that affect a party's commitments.

A Tokenized Incentive With Proof-of-Stake

Plasma chains are represented by sets of EDCCs. In an effort to deter faults and Byzantine behavior on the network, a token can be staked in these contracts. The token will be representative of the network’s interaction with EDCC operation, thus incentivizing that EDCC's security to stakeholders. In a PoS system, stakers will not want the value of their tokens to diminish and therefore will be less likely to cause faults that would damage the value of the token, as may occur in a mass withdrawal.

Stake holders, whether putting up an ERC20 token or Ether, will want to receive the transaction fees they are eligible to collect for operating the network, bolstering the long term value of the staked commodity and making the network more secure.

An Approach To Sharding

Three strategies are proposed in the whitepaper to resolve issues surrounding sharded data sets, wherein a significant risk exists if individual shards refuse to disclose data, making it impossible to create fraud proofs:

1) A new PoS mechanism to encourage block propagation, which should decrease faulty behavior.

2) Significant withdrawal delays which allow for accurate proofs of withdrawal. Since fraud can be prevented on the root blockchain by any honest actor on the same Plasma chain, individuals need not constantly check the blockchain.

3) Creating child chains so that transactions can be propagated in any parent chain. Participants on networks will seek to interact with deep child chains, creating economic efficiency for smaller balances that lack the currency to pay high transaction fees; moving funds can be achieved with many small balances. Participants are encouraged to store value in deeply nested child chains.

Conclusion

There is a lot more to the protocol which is still in a draft form, and must be tested and further developed. A great deal of time, effort, and code will go into integrating the Plasma platform atop existing blockchain protocols. Once the obstacle of scaling Ethereum to billions of public and private transactions  is overcome, there’s no telling how much value will be enjoyed by the ecosystem at large.

Jeremy Nation is a writer living in Los Angeles with interests in technology, human rights, and cuisine. He is a full time staff writer for ETHNews and holds value in Ether.
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