Ethereum creator and co-founder Vitalik Buterin said at Hyperledger Global Forum 2021, an enterprise blockchain event to be held this week, Eth2 will bring scalability and help open the door to more decentralized applications and use cases in the enterprise.
“Our vision for Ethereum has always been to be this platform, open to all these different applications, where your creativity is the limit,” Buterin said. “But if in practice only economics can make only a few things viable, then in a sense it will be a big limitation on how much of our mission we can actually accomplish.”
Buterin was chatting by the fireplace with Brian Belendorf, CEO of Hyperledger, an open source collaborative project hosted by the Linux Foundation created to advance cross-industry blockchain technologies.
Solving Ethereum Scalability Issues
Along with the explosive growth of decentralized finance (DeFi) on Ethereum, transaction costs (gas charges) have skyrocketed and scalability has become an issue. “Right now, transaction fees are high … this drives down the price for users,” Buterin said.
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Work on making Ethereum more scalable, secure, and resilient has been going on since 2014 – even before the official launch of the blockchain platform in July 2015.
Eth2 is being updated gradually. The Beacon Chain update, implemented in December, was the first of Eth2’s updates and brought betting to the Ethereum ecosystem. “The Merge” – the merger of the main Ethereum network with the Proof-of-Stake system of the Beacon Chain – will mark the end of Proof-of-Work Ethereum and is scheduled for the end of this or next year.
Sharding, a multi-stage upgrade to improve Ethereum’s scalability and throughput by using sharding to distribute network load across 64 new chains, is slated to be implemented in 2022 after the merger.
Speaking at a virtual fintech forum at the StartmeupHK Festival 2021 in May, Buterin said Ethereum took longer to build than he expected.
“We thought it would take one year to prove a stake, but it actually takes six years,” he said.
Ethereum’s next major upgrade, London, which is scheduled for next month, will include EIP-1559 upon a change in the fees market, which is expected to lower Ethereum’s transaction fees and add deflationary pressures to the ether supply.
In a chat by the Hyperledger fireplace, Buterin said level 2 solutions like convolutions also came to the fore. Roll-ups execute transactions outside of the Ethereum main chain (tier 1), but place the transaction data at tier 1, resulting in lower user fees and higher blockchain throughput. At the same time sharding will improve scalability by reducing network congestion and increasing the number of transactions per second by creating new chains or “shards”.
“So, we divide a hundred, we multiply by a hundred, we multiply two by ten thousand. And the hope is that you can simultaneously make the platform capable of handling more users and lower transaction fees, ”said Buterin.
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Creation of public blockchains
Noting that there are groups creating public blockchains for enterprises, Buterin said: “We must have an ecosystem in which enterprises and everything, they can live together, and ecosystems can kind of connect to each other and bring each other much more.”
“But the problem is that if you want someone to build a public chain, then you need to lower transaction fees and also address privacy issues,” Buterin said. “And it looks like a different advantage … you have all these very different, different groups building and working on this technology, and each can just perfectly use each other’s things. So I am optimistic about this future. “
Moving from Proof-of-Work to Proof-of-Stake
Regarding Ethereum’s upcoming transition from a proof-of-work consensus mechanism to a proof-of-stake mechanism, Buterin said that reducing Etherum’s resource requirements by more than a thousandfold is “a big motivation.” At the same time, there was no need to compromise between coin supply and network security. “It’s good for the Ethereum community and good for users, good for the world, it’s always great when things go this way,” Buterin said.
Development of the Ethereum community
Regarding having a good open source community that fosters Ethereum, Buterin said the ecosystem should be “open and welcoming.”
“Not everyone who might want to contribute speaks English,” Buterin said, adding that “trying to engage with all local communities is something we have appreciated and have really tried to do for a long time.”
“It’s an open platform and people can just go and build their own interesting and amazing things,” Buterin said.
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