Ethereum has been born 8 years: what great achievements have been made, and what will be the big changes

According to the news, the Ethereum mainnet will be upgraded in London on August 5. It is worth noting that last week was the 6th anniversary of the birth of the Ethereum blockchain, and the price of ETH has also shown a continuous upward trend in the past week.

Since the start of the Ethereum white paper at the end of 2013, Ethereum has grown for nearly 8 years. At first, it was only seen as a solution to the limitations of Bitcoin’s scripting language. The goal was to become a deployment and execution platform for smart contracts. However, after 8 years of growth, it has now become a dominant public chain king with new ones. Ambitious goals.

According to data, as of July 30, Bitcoin ranked 9th in the global asset market value, with a market value of approximately RMB 4.177 trillion. Ethereum ranks 47th in the global asset market value (it rose to 14th in global assets when the ranking was highest), and its market value is now 1.629 trillion yuan. Although less than half of the market value of Bitcoin, Ethereum is in the field of crypto assets. The total market capitalization in circulation is second only to Bitcoin.

Ethereum has been born 8 years: what great achievements have been made, and what will be the big changes

Ethereum has been born 8 years: what great achievements have been made, and what will be the big changes

At the same time, more and more institutional investors choose Ethereum as their investment target, and the ecosystem on the chain is prosperous. Both developers and investors have great expectations for it. Ethereum innovatively uses smart contract technology to push the application of blockchain to a new level, but the higher the status, the heavier the responsibility, and more and more problems are exposed to be solved urgently. Every technical upgrade and progress of Ethereum is prepared. By the attention.

What is the progress of Ethereum at this stage, where is it going next, and what kind of dilemmas may it face?

Ethereum 2.0 is about to come out, technology upgrades bring hope

The “DeFi fever” has led to a substantial increase in the transaction volume on the Ethereum network, resulting in network congestion and the transaction speed is too slow. The main purpose of Ethereum 2.0 is to improve the scalability of Ethereum, that is, to increase the processing speed. V God once said that ETH2.0 can achieve 100,000 transactions per second, and can handle transactions 1,000 times higher than the current version, making Ethereum a real computer, which is full of expectations.

So, let’s review the entire ETH2.0 plan previously announced. This plan is divided into the following four stages: Stage 0: Beacon Chain; Stage 1: Sharding ; Stage 2: Smart Contract; Stage 3: Chain Down state storage; stage 4: sharding contract.

Ethereum has been born 8 years: what great achievements have been made, and what will be the big changes

So what is the current progress? In the near future, there is nothing more concerned about the Ethereum London upgrade, which is expected to go live on August 4th, which includes the following five Ethereum Improvement Proposals (EIP):

EIP-1559: It adds a basic fee for every transaction on the Ethereum blockchain. The second aspect is that fees are no longer paid to miners;
EIP-3198: extend the user experience improvement of EIP1559 to smart contracts, transactions using smart contracts should no longer be paid;
EIP-3529: cancel or cancel through EIP-3529 Reducing refunds will make the network more stable;
EIP-3541: Mainly lay the foundation for future updates, and reserve some space in the network to create new types of smart contracts;
EIP-3554: EIP-3554 has become a hard fork of Ethereum In the standard part, the difficulty bomb will be postponed to December 1, 2021.

As part of the Ethereum 2.0 release roadmap, the London hard fork has been implemented in various test networks, and it is worth looking forward to. After V God published the title “After Ethereum enters 2.0, what will be released? In his speech, it was stated that the basic technical vision of Ethereum is to try to improve quickly in the short term and stabilize in the long term. In the future, the Ethereum will be decentralized by layer 1, and layer 2 will carry out a lot of innovations to make the Ethereum protocol simpler and more convenient to use.

There are two important things for Ethereum 2.0:

The first is to transfer the Ethereum blockchain to the proof-of-stake algorithm (PoS), so that it can work without spending a lot of computing power and electricity.

The second is sharding. By creating a large number of parallel processing blockchains, these blockchains independently process transactions, but at the same time are connected by a public network and operational history.

However, according to the Ethereum roadmap, after the London upgrade, there will also be Optimism public mainnet launch, zkSync 2.0 mainnet release, Eth1/Eth2 combined product testing, and Shanghai upgrade-it is possible to achieve Eth1/Eth2 merger StarkNet universe phase release, decentralization The initial plan is to complete the zk rollup and the Ethereum upgrade to implement validator withdrawal/cleanup after the merger. The initial plan is to be completed around the first quarter of 2022. According to the current situation of the team’s continuous delay, it may be later.

But you don’t have to wait, you can also transition through the Layer 2 scalability solution before this. At present, multiple Layer 2 solutions have been launched, such as ZK Rollups and Optimistic Rollups, etc., and new researchers are emerging in an endless stream, which allows us to see new expectations about blockchain in addition to market prices.

Blockchain is the first public chain, and ecological applications continue to prosper

In fact, after the emergence of smart contracts, the topic of when Ethereum can surpass Bitcoin has never stopped. However, apart from the value storage function of “digital gold”, Bitcoin has not shown much improvement in technology upgrades and other aspects. For example, the Taproot upgrade carried out some time ago has not attracted widespread attention, but the ecology on the Ethereum blockchain has been developing in full swing.

If this continues, in the two years before and after the completion of the ETH2.0 upgrade, Ethereum will derive a more prosperous and vibrant ecosystem.

Ethereum has been born 8 years: what great achievements have been made, and what will be the big changes

Image source: the block

When reviewing the development of Ethereum in 2020, we said that because it is open and programmable, Ethereum provides an unknown vast space and is full of opportunities. In fact, the financial edifice of Ethereum has taken shape so far.

DeFi : At present, DeFi applications are still the most important part of the Ethereum network, such as stable coins MakerDAO, usdt, loan products AAVE, Compound, decentralized trading platform Uniswap, financial derivatives synthetix, dydx, and so on.

Layer2 : In addition, before ETH2.0 comes out, there will be solutions to Layer2, such as Raiden, Loom, Celer, Liquidy Network, and Skale.

Wallet : In the previous article, the vernacular also said that looking at the ecology of a chain, in fact, the simplest indicator is how many wallets are supporting it. And now the wallets that support ETH include MetaMask, MyEtherwalle, imToken, Parity…

NFT : In addition, the previously mentioned ecosystem that began to take root this year is the creator economy of encrypted art, music, and media. For example, most of the issued non-fungible tokens (NFT) are purchased using Ethereum. Compared with Bitcoin, Ethereum has a larger number of transactions.

CBDC : As early as May 2020, V God said that Ethereum may become a permissionless platform for many central bank digital currencies CBDC. If this is V God’s wishful thinking, then in June of this year, the former head of the People’s Bank of China’s digital currency program also proposed: “The central bank’s digital currency (CBDC) will become more “smart” and may one day be in areas such as Ethereum. Run on the blockchain network.”

Not only in China, the Bank of Israel has also reportedly completed a pilot program to use Ethereum technology for central bank digital currency (CBDC) under supervision.

Investment banking giant Goldman Sachs also stated in its “Global Macro Research” report that blockchain platforms like Ethereum may become a huge market for reliable information providers, just like Amazon is today for the consumer goods market. As he said, more and more applications in the above fields have or are continuously enriching the Ethereum ecosystem, showing the “pioneering potential”.

Institutional layout, Ethereum has become a “hot commodity”

With the continuous increase in the market value of Ethereum and the continuous technological updates in the community, the DeFi ecosystem has grown rapidly. Ethereum has successfully attracted the attention of institutional investors and corporate asset allocation. Even many celebrity investors have begun to use Ethereum and NFT The explosive growth of Ethereum has also brought new users and mainstream attention to Ethereum.

For example, in March of this year, Meitu announced that it had purchased a total of about 90 million U.S. dollars worth of cryptocurrency, including 31,000 Ethereum, which was worth more than Bitcoin. Cai Wensheng, the founder of Meitu, said that Meitu is the world’s first listed company to use Ethereum as a monetary value reserve; in the same month, private jet charter operator flyExclusive announced that through cooperation with crypto payment service provider BitPay, its private jet charter flights and Jet Club has accepted cryptocurrency payments and supports Bitcoin, Ethereum or other forms of cryptocurrency payments;

On April 29, according to the Houston Rockets official Twitter, its official store has supported Paypal, Bitcoin, Bitcoin Cash, Ethereum, Dogecoin, USD stablecoin and other cryptocurrency payments.

Not only have institutions started deploying Ethereum, many investors have also expressed optimism about its development and become a “hot commodity.”

NBA Dallas Mavericks owner Mark Cuban said that compared with Bitcoin, Ethereum will have greater development potential in the future, because Ethereum has more applications than Bitcoin. MicroStrategy CEO Michael Saylor also stated that the crypto market can be divided into crypto assets and crypto applications. Bitcoin is the leader in crypto assets, and Ethereum will be the leader in crypto applications.

According to the “Weekly Digital Asset Fund Flow” report by CoinShares, as the trading volume of Ethereum funds has soared, many institutions have dumped Bitcoin and increased their accumulation of Ethereum and other altcoins. More than half of the funds in currency investment products.

However, it is worth noting that there are not many institutions that use or configure cryptocurrencies in the world at present, and even if they are configured, they will choose Bitcoin more. Because in general, there are still a small number of institutions deploying cryptocurrencies so far. In addition to compliance requirements, it is more that the price of Bitcoin is too volatile and needs to bear greater risks. Ethereum Due to “unrestricted total amount, frequent upgrades, low value storage attributes” and other reasons, it has greater volatility than Bitcoin.

But in the long run, Bitcoin has few technical updates and upgrades, and performance improvement is difficult. It is highly probable that for a long period of time, its future positioning is “digital gold” as a store of value . The future of Ethereum is more infinite, especially The DeFi on Ethereum has changed the financial industry to a certain extent. It has begun to be combined with traditional industries. There will be more and more applications . After the price rises, the problems of liquidity and volatility will be solved. Investment possibilities will also be greater.

Ethereum’s current problems are unsolved, where should we go in the future?

Behind the glamorous market value status and big ecology of Ethereum, there are still many problems that need to be solved urgently.

First, in terms of technology, the difficulty bomb has been delayed repeatedly. It was postponed from July to December this year, and it is still unknown whether it will go online. As the Ethereum ecosystem becomes larger and larger, the actual implementation of the difficulty bomb mechanism becomes more and more difficult. If the interests of all parties cannot be balanced, the entire network may be frozen or even collapsed.

Secondly, although most people have high expectations for ETH2.0, this new solution is also subject to many controversies. V God said in an AMA not long ago that even if a solution that perfectly merges ETH1.0 and ETH2.0 can be obtained in March 2021, he and his team will still have to wait until the end of next year to start, because they need It took a lot of time to convince all parties in the community to accept the new plan.

After all, it is difficult to persuade those with vested interests to abandon personal interests and balance and coordinate the interests of all parties. For example, the EIP-1559 protocol was opposed by the miners. It destroyed the Base fee that was originally the mining revenue of the miners and no longer left it to the miners. According to the current Ethereum transaction fees as a percentage of miners’ income, EIP-1559 will greatly reduce the miners’ currency-based income.

At the same time, Ethereum’s plan to change the POW mechanism to a POW/POS hybrid consensus mechanism is likely to cause disagreements in the community to fork and cause harm to the existing ecology.

In addition, due to the market’s enthusiasm for DeFi, it has put pressure on Ethereum’s transaction fees and scalability, and Ethereum 2.0 is in the foreseeable future, causing many people to lose patience and turn to new things such as NFT and Metaverse, losing some of them. user.

In the past eight years, as V God said, Ethereum has almost died many times. If you want to develop into a world computer and a platform for decentralized applications, you want to maintain the world’s second largest cryptocurrency market value, and you want to challenge BTC. Status, we must continue to self-innovate and explore new technical solutions. To borrow a word from materialist dialectics: the future of things development is bright, the road is tortuous, new things will inevitably defeat the old things, I hope the future road of Ethereum is the same.

summary

The development speed of the digital age is staggering, and there are even many people who are not ready, but the problems exposed in the digital age will not stop. As the next “visible and tangible” new technology after the Internet, the Ethereum platform in the blockchain has been given great expectations while also carrying huge responsibilities and pressures. After all, the next challenge for Ethereum may also be the challenge for the entire crypto market.

Perhaps, eagerly knowing the future of Ethereum may not be so important, after all, too much mystery and greatness are full of imagination because of the “unknown”. What do you think of Ethereum’s present and future? Welcome to share your views in the message area.

Author | Sanli

 

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