Whether Ethereum can return to the peak of trillions of market value, these two factors are indispensable
Editor's Note: This article comes fromVernacular Blockchain (ID: hellobtc)Editor's Note: This article comes from
Vernacular Blockchain (ID: hellobtc)
Vernacular Blockchain (ID: hellobtc)
, Author: ZJJ, reproduced by Odaily with authorization.
The time goes back to 2013, when the young guy Vitalik Buterin was still a Bitcoin enthusiast. However, he believes that blockchain can not only be applied to means of payment, but should have more application scenarios.
Therefore, he published the "Ethereum" white paper, a brand-new blockchain underlying system, which aims to expand the application scope of blockchain technology beyond payment. However, no one may have thought that this "concept" has opened up a new era of blockchain 2.0.
Compared with Bitcoin, the Ethereum system has added a set of functions of smart contracts, and uses Solidity as the main programming language, which provides developers with simple and convenient development tools, and realizes the application of smart contracts more quickly. At the same time, unlike the Bitcoin development language, Solidity is a Turing-complete programming language, which enables smart contracts to develop complex applications. It is also a necessary condition for Ethereum to realize the implementation of physical application scenarios.
However, Ethereum's slogan of becoming a "world computer" seems to be still in the proof-of-concept stage. Due to its scalability limitations, the Ethereum network can only process about 15 transactions per second, which is completely unable to meet the conditions required for large-scale applications. .
To make matters worse, if a large transaction occurs, the Ethereum network can become very congested, causing considerable delays in transactions. The most classic case is the CryptoKitty encrypted cat game in 2017. The final result is that it is difficult to achieve a successful transfer even when Ethereum is blocked to high mining fees.
In addition, security is also one of the problems of Ethereum. Many projects have not undergone rigorous verification when developing smart contracts, which eventually makes it easy for hackers to attack and cause serious financial losses. The most famous example is the theft of the Parity wallet, where $32 million worth of ETH was stolen.
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Technology upgrades create a more complete underlying foundation
In fact, Ethereum has been upgrading its underlying technology. From the original Frontier to the Istanbul (Istanbul hard fork upgrade) upgrade the day before yesterday, it stands to reason that the underlying technology of Ethereum has been continuously enhanced, but each version of the upgrade seems to be fixing the previous problems. For solutions to scalability problems, although the community has put forward many ideas, there are very few technical innovations that can truly be implemented.
More importantly, according to the development route of Ethereum (Frontier, Homestead, Metropolis and Serenity), after the Istanbul upgrade, Ethereum will enter the Serenity stage, and Ethereum will also begin to transition to the 2.0 stage, completing the transition from PoW to PoS The conversion, the introduction of a new Ethereum virtual machine, and the realization of a new underlying architecture of the Ethereum, including four stages of beacon chain, shard chain, new Ethereum virtual machine, and continuous improvement.
On the whole, the technical upgrade of Ethereum will eventually create an underlying infrastructure based on PoS+ sharding, so as to meet the underlying system of large-scale commercial applications, so that its performance and security can be greatly improved.
Therefore, it can be seen that technological upgrading will be an important basic condition for the next development of Ethereum. However, only the update and iteration of the underlying technology may not be enough.
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No matter what kind of underlying public chain or protocol, no matter how good the technology is, the key to ultimately determining its ecological prosperity still needs to be "used by someone".
In other words, how many DApps are built and used on this underlying chain is the key. As one of the most important industries for the application of blockchain, the financial industry has become a giant in the ecological application of Ethereum.
According to the data from the Defipulse website, the entire DeFi ecosystem has currently locked nearly 680 million US dollars in digital assets, and this number is still expanding, including lending, derivatives, payment, asset management and other sectors.
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In the long run, with the advent of Ethereum 2.0, more privacy protection and information security measures will allow more and more users to have deeper trust in the DeFi financial mechanism, and the increased scalability and sharding mechanism can To meet the application scenarios with a large number of transaction needs, traditional financial companies may consider entering the DeFi ecosystem to test the waters, and use DeFi to bring new users and vitality.
Summary and Outlook
Not only that, considering that Ethereum 2.0 will realize the innovation of PoS, and as a digital currency with the second largest market value and relatively stable value, ETH may change the existing Staking model and solve the current problem of inhibiting Staking due to the serious instability of many Token prices. The problem of model sustainable development. This will also promote more "coin deposit and interest earning" operations, bring more financial management needs to digital assets, and promote the sustainable development of the entire ecology.
Overall, if Ethereum wants to return to its peak state, two factors, technological innovation and DeFi ecological development, are essential.
Source: The Block
Technological innovation promotes the continuous improvement of the performance of the underlying system, thereby attracting more users and traditional institutions to join. Finance is a highly practical application scenario for the blockchain. These new traffic have promoted the continuous enrichment and prosperity of DeFi applications. So as to realize the sustainable development of the whole ecology.
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