Despite the long lead time, Alex Mashinsky is still optimistic about the future switch to ETH 2.0.
Ethereum 2.0 recently put its beacon chain into operation, completing phase 0 of the Ethereum project’s scaling efforts
Although Alex Mashinsky, CEO and founder of the crypto company Celsius, is confident that Eth2 will be successful, he warns that there must be rapid and significant progress in scalability so that the smart contract platform does not lose its market dominance.
„Ethereum now has to prove that it can scale its transactions 100 times without losing security and decentralization,“ as Mashinsky told Cointelegraph accordingly. And further: „If it doesn’t make it, Cardano and Polkadot will strike.“
At the time of going to press, the Ethereum network is doing 13 transactions per second, according to data from Blockchair. A hundredfold increase would mean a speed of 1,300 transactions per second.
Ethereum is currently the first point of contact for developers who build decentralized apps (DApps), as the blockchain network offers the best conditions for their operation. The decentralized financial services (DeFi), which became a real hype in 2020, are also predominantly based on Ethereum . DApps and DeFi have dramatically increased the use of the blockchain network, which is why transaction fees have recently soared to dizzying heights . However, it is not the increasing number of users that is the problem, because this is actually desired, but the lack of scalability of Ethereum.
With the upgrade to Ethereum 2.0, the blockchain network therefore wants to switch to the proof-of-stake consensus procedure, which enables significantly better scaling
Co-founder Vitalik Buterin is convinced that up to 100,000 transactions per second could be processed in the future.
The long-awaited upgrade, however, has been repeatedly postponed and has just successfully completed phase 0 this week. The founder of the wallet service MyEtherWallet suspects that the other phases could also take several years. Celsius boss Mashinsky does not want to make a forecast for the duration until the full introduction, despite any lengths he is still optimistic about the upgrade.
“I am absolutely convinced of ETH 2.0, even if it takes longer than expected to scale up and eliminate all errors,” says Mashinsky.
The price of the Ethereum cryptocurrency Ether ( ETH ), which currently amounts to just under 590 US dollars, could already be massively affected by the upcoming upgrade in the run-up to the changeover. In the course of phase 0, all participating users had to freeze 32 ETH each in order to provide the 524,288 ETH required for the start of the beacon chain. Since the ETH funds concerned have to remain frozen until the start of phase 2, which may not take place for several years , there is an additional shortage of the cryptocurrency. This will probably increase the price, as Mashinsky also suspected:
“The more ETH is frozen for ETH 2.0 or stored in DeFi projects, the more there will be a shortage, which in combination with an increasing user base will ensure a higher rate. In addition, almost all decentralized crypto exchanges (DEX) are denominated in ETH, which is a great advantage for Ethereum. “
The completion of Phase 0 of Eth2 comes at a time when the entire crypto market is soaring. The market leader Bitcoin ( BTC ) was recently able to climb to a new record high , which has also given all other crypto currencies the slipstream for their own gains.