Ether is dead: Everything we need to know about ETH 2.0

While “Bitcoin is dead” has been backed up by the mainstream media more than 400 times, that statement rarely applies to ethereum, the second largest cryptocurrency by market capitalization.

Ether is dead: Everything we need to know about ETH 2.0

Ethereum is dead.

Somehow, this omen doesn’t make as much sense as Bitcoin’s demise.

While “Bitcoin is dead” has been backed up by the mainstream media more than 400 times, that statement rarely applies to ethereum, the second largest cryptocurrency by market cap.

Usually, we celebrate when bitcoin is declared dead. This almost always means the price will soon rise again, and the media will eat its own words. When ethereum was declared dead, I felt a wave of panic. Something is definitely wrong, something very wrong, and now we’re all screwed.

Ether has a lot to worry about this year:

High gas fees (aka transaction costs to send ETH) making alternative coins like Cardano, Binance Coin and Polkadot superstars. Delay Ethereum upgrades. It also needs to work perfectly or risk losing more support. Unhappy Ether miners don’t want mining to go from proof of work to proof of interest.

Given that Ether is currently slipping into oblivion, I think now is a good time to detail its plans for next year.

EIP-1559 and the Complexity of Proof of Stake

The Ether Improvement Protocol-1559 is expected to be integrated in July and is expected to convert Ether to a proof-of-stake blockchain rather than a proof-of-work.

Instead of rewarding miners with blocks, proof of stake will reward them with actual transaction fees, which will greatly improve transaction efficiency.

No more mining farms that cause huge waste.

No more upselling video cards.

No more getting ripped off like I did.

POS mining means putting Ether tokens in a specific wallet and then freezing them. Doing so earns you a transaction fee when any new transaction is verified on the blockchain. The more you “bet”, the better your chances of winning that fee.

Even Coinbase allows its users to pledge Ether in a proof-of-stake system where you are not a miner, but a forger; and it is easier to become a stronger backer of Ether.

Ether is dead: Everything we need to know about ETH 2.0

While POS will make Ether faster, more efficient, and more environmentally friendly, not everyone is happy with it.

When mining, transaction rewards are not as valuable as receiving an actual Ether token; since miners hold the power of the blockchain, many are unsure what will be left of Ether if enough splits are made.

However, Ether developers have come up with a solution.

EIP-3368 is a compromise between miners and ETH developers. ETH developer Tim Beiko shared the proposal on Twitter, where he suggested increasing the block reward for miners from 2 ETH to 3 ETH.

This would gradually decrease over the next two years until reaching 1 ETH per block, eventually forming a full POS system. I’m curious to see if miners are fully satisfied with this update by then.

Ether is dead: Everything we need to know about ETH 2.0

Amazon’s partnership with Ether

Amazon Web Services now supports the Ether blockchain.

Amazon manages the blockchain initially going live in 2019, and while many see Amazon Web Services as a competitor to Ether – which is designed to be the conduit to the Internet; as AWS is doing now – Amazon sees the partnership as being in their to be in their best interest.

The worrying point about Amazon’s statement is that if they exert enough power over Ether, they could have a big impact on the blockchain. It’s the antithesis of decentralization.

Here’s an excerpt from the announcement

“Amazon Web Services (AWS) announced the general availability of Ether on the Amazon managed blockchain …… With this release, AWS customers can easily provision Ether nodes in minutes and connect to public Ether master and test networks such as Rinkeby and Ropsten. with the Amazon Managed blockchain, customers get a secure network, rest and transport encryption, secure access to the network via the standard open source ethereum api, fast and reliable synchronization to the ethereum blockchain, and persistent resilient storage of ledger data.”

In other words, we can now build Ether nodes on the Amazon blockchain.

Nodes help Ethernet run faster, check transactions, and maintain consensus on the blockchain. We can’t get Ether by running a node, but “Anthony” explained in detail on the Ether Classic forum why you want to run a node:

“There are several reasons to run a node, including:

Are mining alone or running a mining pool, in which case a node is needed to communicate with the network. Wanting to make sure we get transactions to the network. Remote nodes are usually reliable, but are controlled by a third party, which usually inhibits heavy usage. Want to help protect the network; the more independent nodes running the blockchain, the more copies of the blockchain there will be and the more resilient it will be. Want to make the network faster and more secure; the more nodes there are, the lower the latency of shared blocks and the more copies of the blockchain there are.”

Institutional Investors Buy More Ether Than Bitcoin

Ether is dead: Everything we need to know about ETH 2.0

Like Tesla and Square’s interest in Bitcoin, institutional investors are investing in Ether.

Meitu, a Chinese company that makes photo editing apps, became the first major company to acquire Ether.

In fact, the Hong Kong-listed company bought more Ether than Bitcoin on March 5, accumulating $22.1 million worth of Ether and $17.9 million worth of Bitcoin.

Will more companies follow suit and invest more into Ether than Bitcoin? I believe so.

Ether’s 100X Scalability

In a recent landmark appearance on the Tim Ferris Show podcast (probably one of my favorite shows), Ether founder Vitalik Buterin highlighted a “really powerful” scalability solution that would fix scalability issues until ETH 2.0 is fully implemented.

The two solutions are sharding and rollup.

Sharding is ostensibly Ether’s most promising scalability problem. It spreads the computational workload across the blockchain by breaking up large amounts of data into smaller pieces. It will be released together with ETH 2.0

However, both sharding and ETH 2.0 are still a few years away. The solution for the transition phase is “Rollup”.

Rollup extends Ether beyond the blockchain, reducing fees and congestion and, in theory, increasing transaction speed from the current 15 transactions per second to 1000 TPS.

Ether is dead: Everything we need to know about ETH 2.0

Optimistic rollups are the leading scalability solution for Ether today.

Vitalik even mentioned on Ferriss’ podcast that the Optimistic team will be launching rollups “soon” that will help Ether scale 100x.

Buterin said, “If you have rollups, but you don’t have sharding, you still have 100x factor scaling.” “The blockchain still has the ability to reach 1,000 to 4,000 transactions per second, depending on the complexity of those transactions.”

Ether is dead: Everything we need to know about ETH 2.0

Two other upgrades :

The Berlin hard fork is scheduled for April.

The upgrade will make several important improvements to the Ether protocol, including changes to facilitate ETH 2.0.

In addition, EIP-1559 will burn Ether tokens after each transaction, making Ether a deflationary currency. This move will ensure that its price will soar.

Where will Ether go?

Ether can boast, but the real question is can it execute? Walk the walk.

Ether is currently facing many problems, and while the solutions look promising, it is still a steep mountain to climb.

However, what Ether hopes to achieve – as the technological backbone that will drive the world – has many complex obstacles.

If it fails, it’s brilliant.

If it succeeds, I don’t think anyone really understands what it means for the world.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/ether-is-dead-everything-we-need-to-know-about-eth-2-0/
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