https://coincentral.com/plasma-an-innovative-framework-to-scale-ethereum/
Ethereum can process approximately 15 transactions per second, in comparison to Bitcoin’s 7 transactions per second. Both platform’s processing capacities pale in comparison to Visa’s ability to manage 45,000 transactions per second. Plasma promises to enable Ethereum to scale up its processing capacity to thousands or potentially billions of transactions per second.
How does it work?
Plasma plans on being able to implement child blockchains that can process transactions independently from the main chain. At some point the child chain will update the main chain all at once, thereby massively improving efficiency compared to doing all the transactions separately on the main chain. This framework will also allow for multiple layers. Children of children can be created who report to the next link up the chain instead of the main chain. This technology is very similar to Bitcoin's lightning network.
Different from sharding?
Sharding is another technology that aims to help Ethereum scale up. The concepts of both sharding and plasma seem similar, so I had to look up the differences.
https://www.reddit.com/r/ethereum/comments/7afn94/difference_sharding_vs_plasma/
In sharding, the main Ethereum chain is chopped into sections, so each full node verifies the shard it's in, and acts as a light client for the other shards.
In Plasma, you make your own subchains, and can move ETH or other tokens down into the subchain, and back out. To make this work the subchain has more limited computational capabilities; you can only do map-reduce computations, and the tokens use a Bitcoin-like UTXO system.
You can definitely make Plasma subchains rooted in a sharded main chain. The Plasma chains are also hierarchical, so you can root subchains in other subchains and achieve basically unlimited scaling, for applications that can work under its restrictions.
When you consider these facts, both sharding and plasma working together in tandem will scale Ethereum up to incredible levels. No longer will stupid Dapps like Cryptokitties or exchanges looking for publicity be able to bog down the system. This also means that transaction fees will be cut to all time lows.
One of the most exciting things about plasma is the proposed governance system. It looks exactly like the one I proposed for Steem months ago. By creating layered governance systems like this the blockchain community shows that it will one day revolutionize government itself.
Ethereum Killers?
I've said it once I'll say it again: There is no such thing as an Ethereum Killer. There is room in this space for everyone. All this "competition" is being projected onto the blockchain from a toxic world view of corporate competitive capitalism.
There are a quarter million developers on the Ethereum blockchain and rising. We are seeing a new economy forming right before our eyes. A corporation could never achieve such staggering numbers. The world is coming together and saying, "Enough is enough." The old ways are outdated and everyone on the planet should be taken care of instead of exploited.