HOW ETHEREUM PLANS TO SCALE

Scalability has been a stumbling block in the global adoption of the blockchain technology and still continues to be.
Ethereum has been a main victim of scalability issues since from the white paper it is to serve as a virtual world computer to run all decentralized apps (dapps). This would require speed on the part of the Ethereum network but presently this cannot be said of it since it can only process about 15 txs/s (TPS). This is appalling when compared to Visa which can process about 24,000 txs per second.
But Vitalik Buterin and the general Ethereum community have not slept but are engaging in
researches to help Etherum scale quickly and meet global demands. They have put forth some solutions to help scale. They are layer 1-implemented directly on the mainchain and layer 2-implemented on top of a layer on the mainchain.

Layer 1- Sharding

SHARDING

Sharding involves dividing the network into segments called shards as applied in distributed
database systems. Each shard has its own transaction history and set of validators. This brings about scalability by making it no longer imperative for every node on the network to validate every transaction. Validation is now carried out for each shard by its currently assigned validators.

Layer 2- Plasma and Sate Channels

PLASMA

Plasma divides the mainchain into smaller chains called childchains which are characterized by their own consensual mechanisms. Now each dapp deployed on the ethereum network can have its own childchain linked to the mainchain by smart contracts. This has helped to move the pressure from the mainchain and distributed it among its childchains.

STATE CHANNELS

State channels are analogous to the Bitcoin Lightning network. It involves offchain transactions between two parties. The two parties agree on a certain amount which is put in escrow on the mainchain and then they engage in bidirectional transactions offchain. These transactions are facilitated by light nodes. They only report to the mainchain when they close the channel. Now, full nodes on the ethereum network are only bothered with the state before the channel is opened and after it is closed.
Vitalik Buterin has said that there would be synergy between layer 1 and layer 2 solutions to bring about greater scalability.
These solutions are faced with some challenges which has delayed their release to the mainnet but we expect them and Ethereum’s Proof of Stake (POS), Cassper to be released in the not too distant future. This would incentivize dapp development and bring about global adoption.