You forgot to mention another scaling effort/idea, one which I think is the most important, not only to Ethereum but any blockchain:
Blockchain Interoperability.
It can even be the same protocol (Ethereum) or across different protocols (Bitcoin).
Much of the enterprise world right now is throwing A LOT of development efforts at blockchain ideas, however they are all separated, private chains, they aren't just working on the Ethereum public chain (Homestead). However the development efforts of those companies will benefit the public chains, which is crucial.
But I think at this point the idea of having a single public chain to rule over everyone is gone. The future will have millions of blockchains.. an internet of blockchains with some underlying protocols to transact across chains. This is where you will get your scale.
Take the FaceBook example. What if the users of FaceBook, i.e. the FB clients, implemented a blockchain to support all functionality through FB (payments, sharing, likes, messages, etc.)? It would basically be away for users to control their own data, separate from the applications that use them (Own your data). But for brevity, this chain would just be the FB chain, which could interop with any number of chains if needed, but this chain would be scaled by the clients that use it. You could even have social verifiers to implement a POS (proof-of-stake) in this FB chain which could stake an asset of some sort on assuring things shared on the network are real (fake news). But that's off point.
The whole idea of this new internet of blockchains is mostly about users having complete control/self-sovereignty over their data/individual. Many users won't even know that underlying the apps they use, their data and how they interact with other users is powered by the blockchain.
Smart contracts, and all these thousands of tokens, in essence, given an underlying protocol that doesn't exist yet, will be the universal API that can connect everything in a trustless way.
[One:] Today we’re going to a social media website on the internet. This website is called thefacebook.com. It doesn’t have blockchain technology at all, but you know what we're going to do? We’re going to put things on the blockchain.
[Two:] Scale it up, make it interoperable!
[Mark Zuckerberg:] Thank... you?
(together) Put it on the blockchain!
[One:] I’m putting this messaging platform on the blockchain. It’s a blockchain. It’s an immutable distributed ledger that uses mathematical proof-of-stake tokens to democratize the transfer of knowledge.
[Two:] What a sad little micropayment platform. I know, I’ll put it on the blockchain! Did you use this payment system before? I didn’t. Now it’s on the blockchain. Its token-generated smart contracts offer nearly limitless self-sovereignty over how users interop with their data.
[One:] I’m going to put the graph network on the blockchain.
[Two:] The cryptographic hash function is so pretty!
Ever since the DAO went live on Etherium, simultaneously blockchain became law and smart contracts replaced lawyers.
In short a complex scheme to get the world to sign a contract that reads:
"I hereby enter this contract - because I cant read the language the contract is written - and unknowingly agree that I will agree to all future contracts, and for good measure I'm going to give the other party to this contract access to my money to expedite the next contract."
And that's why yesterday's Decentralized Autonomous Organization is today's Initial Coin Offering...if people could understand the simple truth:
An ICO "crypto coin" is a receipt for crowdfunding an idea for a product. The receipt/coin is not ownership/equity if the idea ever becomes a successful company. Somehow because the receipts are held on a distributed ledger (block chain) and called a "crypto coin" the receipt has somehow become something of value speculators will buy and sell on a secondary market.
Once you understand this truth you understand why traditional brick and mortars are getting interested in block chain technology, soon customers will buy something at Walmart and as a receipt of the transaction Walmart will issue a "crypto coin" on the blockchain and the customer will be able to sell that in the secondary market and buy more product at Walmart.
Not really, thankfully we cannot put people in prison by mere majority.
People go to prison if they violate the law, not because 51 members out of 100 voted that someone is a bad guy.
Not even democracy works like that, where the majority rules (dictatorship of the majority.) Or, at least, it should not. There are many checks and balances that are definitely not captured by a simple distributed hash.
"Cross Blockchains. Cross-chain atomic swaps can occur off-chain instantly with heterogeneous blockchain consensus rules. So long as the chains can support the same cryptographic hash function, it is possible to make transactions across blockchains without trust in 3rd party custodians."
I agree that there will be lots of 'blockchains', but there will still be some hierarchical topology based on the tradeoffs that have to be made regarding trust/risk and liquidity of when & where your tokens are 'located'.
The internet isn't possible without address space administration (even in the case of IPv6?). It appears to live at the edges, but there's still a hierarchy. And I can't imagine, at least with today's tech, how expensive it would be to have to speculate on N tokens across N blockchains to form a transaction, so I expect to keep things relatively useful, there will still have to be a singular source of truth for a given token.
How would inter-operability differ from sharding? Is the difference that sharding only works with a specific blockchain technology, and inter-operability could connect multiple, technologically different, blockchains?
Yes, each chain on its own can use sharding. The protocol underlying each chain/sharding method would have to implement the interoperability of chains protocol.
Think of it like TCP/IP today. In your own network, you can use whatever you want, let's say Zigbee. Once I want to interop with other networks though, I'll have to go to TCP/IP or similar.
The value of the network does go up the more people use it, and therefore, there are more transactions per user. However, the amount of transactions that each user produces will probably not scale linearly with the network size.
Maybe I'm misunderstanding but are you saying that it's likely that we will see a proliferation of private blockchains that interact with public blockchains (kinda like how the internet works now)?
Blockchain Interoperability.
It can even be the same protocol (Ethereum) or across different protocols (Bitcoin).
Much of the enterprise world right now is throwing A LOT of development efforts at blockchain ideas, however they are all separated, private chains, they aren't just working on the Ethereum public chain (Homestead). However the development efforts of those companies will benefit the public chains, which is crucial.
But I think at this point the idea of having a single public chain to rule over everyone is gone. The future will have millions of blockchains.. an internet of blockchains with some underlying protocols to transact across chains. This is where you will get your scale.
Take the FaceBook example. What if the users of FaceBook, i.e. the FB clients, implemented a blockchain to support all functionality through FB (payments, sharing, likes, messages, etc.)? It would basically be away for users to control their own data, separate from the applications that use them (Own your data). But for brevity, this chain would just be the FB chain, which could interop with any number of chains if needed, but this chain would be scaled by the clients that use it. You could even have social verifiers to implement a POS (proof-of-stake) in this FB chain which could stake an asset of some sort on assuring things shared on the network are real (fake news). But that's off point.
The whole idea of this new internet of blockchains is mostly about users having complete control/self-sovereignty over their data/individual. Many users won't even know that underlying the apps they use, their data and how they interact with other users is powered by the blockchain.
Smart contracts, and all these thousands of tokens, in essence, given an underlying protocol that doesn't exist yet, will be the universal API that can connect everything in a trustless way.