Ethereum 2.0 launch encounters challenges
The launch of Ethereum 2.0 gradually turns into a mythological event, in that the development team continues to postpone the planned release. Towards the middle of the year, the development team indicates that the launch is scheduled for June 2020.
The arrival of Ethereum’s staking is the most important and important event of 2020 after the bitcoin has been halved, and most market players have high expectations. The hype is linked to the fact that Ethereum will move from mining consensus to the Proof-of-Stake algorithm, thereby making mining equipment redundant. With the new system, ETH holders will be able to deposit their coins and become validators and receive prizes.
However, the eagerly awaited update of Ethereum phase 0 Serenity it doesn’t even have a provisional launch date yet, because the testnet has only been operational for two months.
What will it solve?
The main benefits of moving from PoW to PoS for Ethereum are: greater decentralization and in a serious increased energy efficiency.
With decentralization in mind, Ethereum users will benefit from being able to loot their assets and dispose of expensive mining equipment, thereby simply retaining their parts in exchange for rewards. Such an increase in accessibility will certainly open up new horizons for the application of cryptocurrency and reduce energy consumption.
In addition to becoming more energy efficient and easy to use, The Ethereum network will become more competitive compared to the Bitcoin blockchain. By eliminating mining, ETH will become more accessible and have a more fluid architecture for better integration operations, thus gaining ground on the market.
The security levels to be implemented as part of the Ethereum 2.0 update and the staking mechanism will make the network safer and more resistant to attack. Each attack will be considerably more risky, as a huge amount of ETH will be required to manipulate the network. A single challenge to the blocking of the aggressor by any participant in the network would endanger the entire aggressor’s quota, which could be cut and returned to the disputing party.
Equally important is the fact that the transition from mining to staking will make it clear that blockchain networks are becoming more mature as economic instruments. The multiple optimizations provided with Ethereum 2.0 will also represent an incentive for new applications to make the leap in quality and to build their services on the new platform.
Too little, too late
The Ethereum team is working on its update, which has been announced for so long that it seems that it has not understood that there are other projects in the race to implement the staking. It is not surprising that one of the competitors has already successfully launched an operational network that surpasses existing options.
Harmony, a Silicon Valley startup, announced that it has launched a staking module on its platform, thus becoming the first blockchain that combines PoS and sharding technologies. Over 300 nodes managed by users around the world have already been created and the network has proven to be a successful solution to the problem of scalability of blockchains. Harmony says that validators can earn between 45% and 15% per year for the first year.
Technically, Harmony offers one of the highest transaction speeds among the basic protocol blockchains – only 8 seconds per transaction with forecasts of up to 3 seconds. In addition, transaction costs are minimal, hovering around $ 0.000001, placing the currency higher than its main competitors. Harmony’s blockchain has achieved these impressive results after solving critical problems of low bandwidth, latency and scalability using sharing technology. The concept of sharding involves a long blockchain containing segments positioned horizontally relative to the database, thus storing the data on separate servers. This load distribution makes the storage process more efficient. To make the network even more efficient, it is also divided into 4 segments for faster operation.
Harmony plans to increase the number of knots to 1,000 by the end of the year. In addition, using the Proof-of-Stake algorithm instead of the Delegated Proof-of-Stake (DPoS) means that anyone with ONE native token can become a validator and start receiving passive income.
The blockchain arms race
Harmony is not alone in the race for the best staking solution. There are other plans in the race to conquer first place and be the first to defeat Ethereum. Among these are Hyphen, Cosmos East Qtum, among many others.
Dash claims to be trying to be the best version of Bitcoin and operate through a two-level incentive called the Masternode network. The latter works on the PoS algorithm and relies on a system of master nodes for validation. The initial charge is DASH 1,000 which serves as a guarantee. Such an approach improves scalability and requires that all nodes validate transactions in order to approve them.
Cosmos is a network that aims to become an interoperable blockchain for easy integration of dApps. The underlying PoS algorithm works on the ATOM token and owners can delegate their participation to one of the 100 validators. Cosmos’ cutoff mechanism promotes honesty because it destroys the staked token in the event of fraudulent behavior. Cosmos yields range from 7% to 20% per year.
Qtum is also a PoS blockchain built on the version 3 update for UTXO-based blockchains. Compared to Ethereum, Qtum has a number of security advantages over the ETH Casper model. Qtum’s decentralized governance protocol allows you to modify specific blockchain parameters using smart contracts. For example, the block size of Qtum can be increased without the need for a hard fork.
At the dawn of a new era
With the update of Ethereum 2.0, the competition is preparing to compare its products with the giant. But the big question is whether all these solutions can completely replace Ethereum 2.0 or if they will coexist. Only time and the full implementation of Ethereum 2.0 can tell.
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