Unbeknownst to the attendees of the EthCC Ethereum Community Conference in France, Vitalik Buterin showed up to present news about a new upgrade. According to Buterin, a scaling solution for Ethereum’s smart contract system, Plasma, would be released to increase its computational functionality.

Buterin teamed up with Bitcoin Lightning Network co-creator Joseph Poon, as well as developers Dan Robinson and Karl Floersch to develop this new solution. Their goal was to increase the capacity of Ethereum by creating a layer of smart contracts that interact with the main blockchain. With this data architecture, clients will need to process far less data. They will no longer need to download the full Plasma history. Instead, Plasma Coins would be used to deposit funds to each smart contract.  Then, only tokens would need to be tracked, rather than everything. Users will just verify the availability and correctness of the Plasma chain. Not only would this system reduce data requirements and increase speeds, but it would improve data security. With exchange hacks finding their way into the news every week, a logical use case would be to protect cryptocurrency exchanges from large-scale hacks. As Buterin put it, “Hopefully when the next multi-billion dollar exchange written by a totally incompetent developer gets hacked, no one will lose any money.”

The Ethereum user base is accelerating rapidly, particularly due to the large number of ICOs that use it as their platform of choice. The goal of Plasma Scaling will be to keep pace with this growth so that Ethereum remains a viable choice for smart contract functionality.

The top two cryptocurrencies – Ethereum and Bitcoin, appear to be in competition over improved functionality. With the advent of Lightning Network, Bitcoin transactions will be faster and cheaper, solving the greatest problem with the grand-daddy of all cryptocurrencies. Though Lightning Network is not without its controversies, it will be a welcomed change by most people in the community, particularly since SegWit has been adopted on Bitcoin and Litecoin networks. With the advent of SegWit, Lightning Network transactions would have been too risky.

Plasma came about in August of 2017, when Buterin and Poon collaborated on the cross-platform ideas behind Ethereum and Lightning Network. Solving the problems associated with capacity issues and rising smart contract fees was a major accomplishment with Plasma. It has overshadowed other efforts to improve the scalability of Ethereum, such as TrueBut, which had a goal to make smart contract computations more powerful, so that they could be used for such things as rendering photos, machine learning and artificial intelligence.

This sharing of knowledge between Bitcoin developers and Ethereum developers will help blockchain technology to flourish. Unlike most problems with fiat currencies, when there are problems with crypto, the community gets together and solves them. This partnership between Vitalik Buterin and the Lightning Network team will serve the community well, and will drive cryptocurrency usage further towards mainstream adoption. Banks and governments are working on developing their own centralized blockchain equivalents of these popular solutions. It is only natural for these, the most decentralized digital currencies, to push back and reclaim their positions in usage and adoption.