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.
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.