ETH2: Phase Zero
Today the ETH2 fork has gone live.
https://decrypt.co/49992/ethereum-2-0-launches-tomorrow-heres-what-to-expect
There's not a whole lot users must do during Phase 0 of the proof-of-stake network.
The Eth2 network won't be fully functional until further upgrades are launched.
So apparently ETH2 needs to be upgraded several times in order to merge ETH into it. Until then ETH2 is just kinda on the side hanging out.
Sell the news?
Maybe not. More than 867k ETH ($500M+) Ethereum has been staked into the new network. Apparently that stake is going to be locked up for quite some time. Again, I'll be looking for market instability in December, and I'm not seeing that yet. Bitcoin & Ethereum may carry us yet further into the new year.
Ethereum 2.0 doesn’t do much from a user standpoint. As the Foundation’s handy-dandy explainer puts it, “It won’t be like the Ethereum mainnet of today. It can’t handle accounts or smart contracts.”
The next step is creating shard chains, ideally in 2021, which theoretically allow the blockchain to handle many more transactions per second than proof-of-work Ethereum, which often struggles with congestion. In 2021 or 2022, Phase 1.5 should hit, at which point Eth1 and Eth2 converge and the new blockchain should become broadly usable.
Sharding and Plasma are scaling solutions I've talked about long ago. It seems as though ETH development continues to crawl at a snail's pace. We're always hearing, "Just two more years."
Plasma: Ethereum's Lightning Network
Wow... wrote that one back in summer 2018 and you can see by the rewards that curation was still 75/25 heh.
This is a big drawback for the top-of-the-pyramid chains. Dev teams become very centralized because initial stake is very centralized. The Ethereum Foundation has quite a 'healthy' ninjamine at their disposal.
While it can be quite profitable to boot up a dev team to work on an ERC-20 token there's a lot less incentive to help improve the core infrastructure apart from the Ethereum Foundation. It becomes very clear that these financial incentives will have to become heavily decentralized in the future in order for networks to scale on flat architecture.
Hive has the DAO dev fund but that experiment has yet to prove itself. There's no telling whether or not that experiment is going to bring an overall net gain to the platform. I believe it will, but dumping the ninjamine into it makes it a huge honeypot attack vector to siphon value out of the network. I'm not too worried about it though considering the transparency of the system.
The extended rollout means that anyone who staked ETH for the launch also needn’t do anything but wait. That Ether is going to be there awhile.
Coinbase is also historically super bullish on Ethereum and has already declared they are going to support staking in this way by proxy as the custodian of their user's ETH.
Instead, so-called Phase 0 introduces proof of stake, in which ETH holders lock up their crypto for a chance to earn a portion of the block rewards.
Phase 3: Profit
Ethereum has a long way to go, but when ETH finally does get merged into ETH2, the speed, scalability, and volume of the network should increase exponentially.
If crypto was mainstream already and several large tech companies were invested into the ETH ecosystem, a lot of these upgrades would likely be developed for free compliments of the institutions that depend on them.
Amazon, Google, Microsoft, Facebook, etc, have all contributed to open source projects in the past. It's only a matter of time before these Goliaths have so much stake in crypto that it becomes profitable to create such open source code for the rest of the world. The cryptosphere is a self-funding organism. The real value comes from within.
I've already lambasted Facebook several times for trying to do this whole Libra thing when they could have avoided regulations altogether by simply using Bitcoin and helping flush out the Lightning Network. Some corporations will fork their own product in order to control it. Others will realize it's more profitable to simply tap into an existing established community. It's all a matter of time, and 2021 is gonna be a big year on all fronts.
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