Ethereum co-founder Joe Lubin: Ethereum 2.0 will be launched in the second quarter of this year

Joe Lubin, CEO of ConsenSys and co-founder of Ethereum, believes that the next era of Ethereum will come in the next few months.

Screenshot 2022-03-17 3.10.27 pm.png

In a December interview in Miami, Lubin predicted that Ethereum 2.0 would launch in the “second or possibly third quarter” of this year. At the Camp Ethereal crypto event in Wyoming last week, Lubin stuck to that prediction.

“My estimates remain the same, we have a strong team that has put a lot of effort into this,” Lubin said.

The next step will be to transform the current Ethereum mainnet (which we call Ethereum 1.0) into a ghost network currently running in parallel (technically called the Beacon Chain, which will evolve into Ethereum 2.0).

Instead of executing real transactions, the beacon chain now creates a space for validators (computers verifying encrypted transactions) to lock up their hard-earned ether. It laid the foundation for Ethereum to transition from the currently used Proof of Work (PoW) mechanism to Proof of Stake (PoS).

Bitcoin also uses the PoW mechanism and has been criticized globally for its huge energy consumption. There are currently no plans to change this.

Under the new mechanism, Ethereum validators are rewarded for making sure the network processes correct transactions. Currently, the reward pays out 5.54% of ETH to stakers, according to data pulled from Staking Rewards.

However, validators are penalized if they are caught adding fraudulent transactions to the Ethereum blockchain.

On Tuesday, ethereum developers announced that the new ethereum testnet had been successfully merged and transitioned to a proof-of-stake consensus mechanism. A testnet is essentially a cryptographic sandbox where developers can test new upgrades or protocol changes without causing serious damage to the actual blockchain network. Core developer Tim Beiko tweeted, “It seems to be working, validators are producing merged blocks that contain transactions!”

Screenshot 2022-03-17 PM 3.11.24.png

Ethereum 2.0, now renamed the “consensus layer”, will come alive once it executes on mainnet.

What will Ethereum 2.0 bring?

Aside from the various speculations surrounding the exact release date, Crypto Twitter posts explain and debate what the upgrade means for the network and its users.

Screenshot 2022-03-17 3.13.00 pm.png

Ethereum 2.0 will bring several key changes, namely creating an environment in which sharded chains and aggregation technology can theoretically increase transaction speed and reduce costs.

Ethereum 2.0 will indeed bring lower energy usage and lower gas fees, although many in the crypto community are skeptical of the latter.

Lubin said, “The merger will end proof-of-work, it will end Ethereum’s carbon footprint, and everything will go away. In terms of energy, the cost is orders of magnitude lower. Another exciting fact about moving to proof-of-stake is that , the proof-of-work mechanism needs to issue a lot of ETH to incentivize these people with a lot of infrastructure to lend their resources and validate transactions on the network. So if you have very little infrastructure, you can build issued less ETH in blocks.”

After making ethereum cheaper and greener, Lubin added that the upgrade will also turn ethereum, the world’s second-largest cryptocurrency, into a “super-stable currency.”

Moving to Ethereum 2.0 will result in a lower emission rate, which means that less Ethereum will be given to validators to secure the network, as they are much cheaper to operate. For example, running a traditional PoW mining rig comes with a huge overhead. Without this overhead, validators would still be motivated to do their job well, even if the reward was slashed. This, in turn, means less supply of new ETH entering the market.

Meanwhile, Ethereum’s latest EIP-1559 improvement introduced a burn mechanism that burns a certain amount of ETH for each transaction.

These two changes create an environment in which a lot of ETH is destroyed on the one hand, and less ETH is created on the other. In an instant, huge deflationary pressures emerged.

“When the merger happens, we will be burning more ETH per day than issuing because less ETH will be issued to protect the network, and ultra-stable money is on the horizon,” Lubin said.

Posted by:CoinYuppie,Reprinted with attribution to:
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

Like (0)
Donate Buy me a coffee Buy me a coffee
Previous 2022-03-17 23:40
Next 2022-03-17 23:41

Related articles