The revival of the public chain in the Warring States Period, what are the odds of winning for Ethereum 2.0?
Ethereum is starting a brand new decentralized track.
After experiencing the turmoil in the public chain structure in 2019, Ethereum, which had been silent for a year, finally overcame all obstacles in the fierce struggle of the public chain and returned to the second place in market value.
secondary title
Frequent Network Congestion "Public Chain King" Falls to the Altar
Created a precedent for smart contracts and significantly increased transaction speed. Ethereum quickly became the most popular "king of public chains" after Bitcoin after its launch. At that time, both Ethereum and Bitcoin adopted the same consensus mechanism - POW (Proof of Work). Bitcoin can only confirm a transaction every 10 minutes, while Ethereum has increased this speed to 15 seconds.
However, with the continuous occurrence of network congestion incidents, this advantage of Ethereum has become a disadvantage. At the end of 2017, CryptoKitties became popular, and the problem of network congestion in Ethereum was exposed for the first time; in August 2019, the additional issuance of USDT caused network congestion in Ethereum, and the utilization rate of Ethereum network once soared to 90%; in July this year, DeFi (going to Centralized finance) use cases surged, the utilization rate of the Ethereum network exceeded 96%, tens of thousands of transactions were waiting to be packaged and could not be confirmed, and the transaction fee Gas once soared to more than 90 Gwei.
In this regard, Vitalik said on Twitter that transaction fee income is close to half of block rewards, which will threaten the security of Ethereum. He also cited a Princeton University paper calling for reform of the cryptocurrency fee system to protect the security of the network. He pointed out: "Miners' increasing reliance on fees may incentivize selfish mining behavior, and miners may disrupt transaction processing in order to obtain greater profits."
The core of Ethereum congestion is the system throughput problem. System throughput is generally used to measure the efficiency of the public chain, and its unit is the number of transactions per second (TPS). At present, the TPS of Ethereum is 30-40 transactions per second, that is, it can process 30 to 40 transactions per second. During the Double 11 Shopping Festival in 2019, the highest load of Taobao transactions per second has reached 540,000, which is more than 10,000 times that of Ethereum. Therefore, when there are more pending transactions in Ethereum, it is very easy to cause network congestion.
The bottleneck encountered by Ethereum in terms of efficiency is that each transfer needs to be processed by all nodes in the network one by one, and the workload that each node can undertake is limited. If you want to improve efficiency, there are fundamentally two solutions: one is to let each node in the network take on more work, such as doubling the block size; The public chain bears more transfer methods.
In terms of the expansion of the public chain, some solutions have emerged on the market. These solutions either sacrifice security or sacrifice decentralization in an attempt to improve efficiency. For example, the Lightning Network, the DPOS consensus mechanism adopted by EOS, etc., but Vitalik insists on using the time-consuming and technically difficult sharding technology (Sharding) to solve the problem of Ethereum congestion.
He explained: "Existing blockchains sacrifice efficiency, the interconnection scheme of blockchains sacrifices security, and schemes such as super-large blocks and super nodes sacrifice decentralization. I hope to achieve this on the main chain. It can process thousands of transactions per second without relying on any super nodes."
secondary title
text
The Ethereum 2.0 multi-client test network Medalla was officially launched at 21:00 on August 4, Beijing time. Although there were many twists and turns during the period, such as delays in the launch, the number of pledges to start the test network was reached ahead of schedule, which also reflected the market’s interest in Ethereum. Expectations for 2.0 are high.
According to official data, Medalla reached the minimum pledge standard (524,000 ETH, more than 16,000 validators) ahead of schedule on August 3. Six hours before the launch of Medalla, the number of ETH pledges has exceeded 710,000.
According to the design of Ethereum 2.0, the threshold for the "beacon chain" to produce a Genesis Block is to pledge at least 52.4 ETH on the smart contract and have at least 160,000 validators. Staking rewards will not be distributed to validators until this threshold is reached.
The launch of the beacon chain is crucial, and it lays the foundation for the realization of version 2.0 of Ethereum.
After the beacon chain goes online, it will inherit the two-way chain bridge model of the POW chain and the POS chain, that is, before ensuring that Ethereum 2.0 can support DApps for millions of transactions, it will go from POW (workload proof) to POS (stake proof) consensus Mechanic transitions create proving grounds. At the same time, in order to ensure the ecological stability of the existing Ethereum, Ethereum 1.0 and Ethereum 2.0 run in parallel at this stage, and when the stage 1.5 is reached, the two chains will be merged and completely become a POS consensus mechanism. It’s worth noting that the Beacon Chain phase is not yet capable of processing transactions, executing smart contracts, or supporting decentralized applications (DApps).
The implementation of the beacon chain will herald that Ethereum is finally moving towards the "sharding" technology that Vitalik mentioned many times.
Phase 1 will implement shard chains, the Ethereum 2.0 scalability solution. Ethereum 2.0 uses the beacon chain as the main chain, and then splits it into 64 independent chains (ie, shard chains). These chains run in parallel and seamlessly interoperate. Due to the seamless interoperability of 64 chains at the same time, the workload of processing data can be distributed on multiple blocks that are processed at the same time, thereby improving transaction efficiency and reducing transaction procedures (Gas) costs.
At present, Ethereum is at a critical stage of opening the 2.0 chapter. 2017 was the highlight period for Ethereum, and the bear market, congestion and the rise of emerging challengers caught it off guard in 2018 and brought it a fatal blow. After several ups and downs, DeFi (decentralized finance) became popular and pushed Ethereum to the throne.
"However, relying on 'liquidity mining' to boost the market enthusiasm for DeFi is not a long-term solution. The prosperity of Ethereum ultimately depends on easy-to-use technology and community consensus." Professionals close to the blockchain field said .
The landing of Ethereum 2.0 requires not only the support of proof of rights and sharding systems, but also enough attractiveness to allow economically significant parts of the original Ethereum ecosystem to join it. During this period, smart contracts and DeFi systems need to choose their shards and invest in upgrading their technology to adapt to the complexity and limitations of sharded systems. Therefore, the construction of the Ethereum 2.0 ecosystem is a long and tedious process. Due to the complex design of Ethereum 2.0 and the parallel trial and error and practice mode, mistakes may be made accidentally, and may even lead to further delays.
With the continued popularity of DeFi, the competition in the public chain track is becoming more and more fierce, and new public chain projects are rising along with the trend. How much chance can 2.0 bring to Ethereum?
