Ethereum co-founder Vitalik Buterin has shared some bullishness for the year ahead, including reaching a new milestone for rollup scaling as per the Ethereum roadmap.
The Ethereum developer also confirmed the rollout of the Ethereum Improvement Protocol (EIP) 4884 sometime in 2023, which had been removed as part of the upcoming Shanghai upgrade package set for March.
Ethereum co-founder Vitalik Buterin
Responding to a post from former chief technology officer of Coinbase, Balaji Srinivasan, asking users what they were bullish for in 2023, Buterin said he was looking forward to reaching the “basic rollup scaling” milestone as outlined in the Ethereum roadmap.
He explained that this meant the rollout of The Surge-related Ethereum Improvement Proposal (EIP)-4884.
EIP-4884 was initially expected to be packaged in with Shanghai, introducing “proto-danksharding” to significantly enhance layer-2 rollup scalability, the Surge, ahead of the full implementation of the major Sharding upgrade late next year.
He also said that this would mean that rollups would be “partially taking off training wheels, at least to stage 1,” referring to a Nov. 22 post on the “Ethereum Magicians forum,” which describes three stages of the “trust model” based on how mature a project’s tech was.
Stage 0, which Buterin likens to having “full training wheels,” has the requirements for all transactions to be on-chain and provide users the ability to withdraw their assets without the operator.
Stage 1, or “limited training wheels,” must have a transaction verification method such as a fraud proof or validity proof scheme to accept or reject which transactions are allowed by the smart contract, along with an overriding security council to oversee the process.
While stage 2 has “no training wheels” and must have two distinct fraud provers, two distinct validity provers, or one of each. Upgrades are allowed at this stage but must have a delay of more than 30 days.
In a separate Twitter post one day earlier on Dec. 30, Buterin also made some comments on what he believes a “Good Crypto Future” might look like.
Buterin outlined several areas of crypto that would need to be fixed, including scaling, privacy, user experience and making user accounts more secure for average users than centralized services.
He also sees payments and decentralized finance (DeFi) being part of this future, and new organizational paradigms powered by decentralized autonomous organizations (DAOs).
Leading cryptocurrency Etherium has announced the completion of its anticipated software upgrade which has been in the news for months now. According to company news, software for the ethereum blockchain has been overhauled, drastically reducing its energy usage, its inventor and co-founder tweeted on Thursday.
The new system will use 99.95% less energy, according to the Ethereum Foundation. To its proponents, the upgrade represents a major advantage as ethereum seeks to surpass rival blockchain bitcoin.
Most blockchains devour large amounts of energy and have come under fire from environmentalists and some investors. Before the software upgrade, which is known as Merge, a single transaction on ethereum used as much power as an average US household uses in a week, according to researcher Digiconomist.
The overhaul has changed how transactions on the ethereum blockchain occur and how ether tokens, the second largest crypto coin after bitcoin, are created.
Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.
— vitalik.eth (@VitalikButerin) September 15, 2022.
Ethereum has moved from a “proof of work” system, in which energy-hungry computers validate transactions by solving complex maths problems, to a “proof of stake” system, where individuals and companies act as validators, using their ether as collateral, to win newly created tokens.
“Happy merge all,” inventor Vitalik Buterin said in a tweet. “This is a big moment for the Ethereum ecosystem.”
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Ethereum, the world’s most used cryptocurrency blockchain network, passed a milestone test ahead of a highly anticipated technical upgrade without any major glitches.
Developers ran the latest software for the upgrade known as the Merge on Ropsten, which is one of the oldest so-called testnets of the network. The testnets are used by developers to find potential bugs and glitches before moving their applications to the blockchain. While the Merge has been carried out on other testnets earlier this year, Ropsten was seen as providing the most realistic technical environment and the best estimate for the outcome of the final process.
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The first post-Merge block of transactions was finalised around 12pm New York time, which means the Merge on the testnet was complete, said Tim Beiko, a computer scientist who coordinates ethereum developers.
The network is stable, but there are some minor (known + expected) issues we are looking into
“The network is stable, but there are some minor (known + expected) issues we are looking into,” Beiko said in a message. “Overall, though, things are looking good.”
While the Merge has faced multiple delays in the past few years, ethereum co-founder Vitalik Buterin said recently that it can take place as soon as August. The upgrade will enable the network to move from the proof-of-work consensus mechanism, where miners use powerful computers to authenticate and order transactions to secure ethereum, to proof-of-stake. Holders of the network’s native token ether will perform the same tasks after the switch.
Investors have considered the revamp as a bullish signal for the network and its token as the switch is seen as reducing ethereum’s carbon footprint by 99% and addressing concerns from environmentalist groups. It will also slow issuance of new tokens, which some observers say could give a boost to the price of the second-largest cryptocurrency by market value after bitcoin.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Sometime later this year, ethereum is set to make the biggest change in its near-decade history, an event that’s certain to ripple through the entire ecosystem of cryptocurrencies and digital assets. Think of it this way: the most important commercial highway in crypto is about to be completely repaved.
Ethereum is essentially computer software that uses so-called blockchain technology to provide a digital ledger for recording transactions. It’s become the most popular basis for a growing array of commercial crypto assets and applications, including lending products, non-fungible tokens (NFTs), as well as its native token, ether.
Ethereum isn’t owned by anyone but built and refined by a community of developers, and it runs on a network of data centres throughout the world. These data centres operate as “miners” on the network, ordering transactions that are posted to the digital ledger. In return, these miners get paid in ether. This system has been dubbed “proof of work”.
Ethereum’s $415.3-billion market capitalisation depends on the Merge going smoothly
Developers who work on refining the ethereum software roll out periodic upgrades, but none has been as major as the one expected this year. Named “the Merge”, it will replace miners with so-called “stakers”. Miners order transactions by solving complex calculations using millions of powerful servers — a system that’s been criticised for its heavy use of electricity. Stakers, by contrast, will order transactions by putting up their own ether on a new system, which has been in testing since December 2020. People can already use their digital wallets to stake ether on this test system, called the Beacon Chain; after the Merge they will start to be selected at random to become what are known as validators, ordering transactions on the ethereum digital ledger into blocks and getting paid with new ether. This is called “proof of stake”.
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Ethereum’s US$415.3-billion market capitalization depends on the Merge going smoothly, but so do the thousands of businesses that operate on the blockchain, plus millions of users. Some $121.5-billion of capital is locked in ethereum’s decentralised finance (DeFi) apps, according to tracker DappRadar. Most NFTs — also with a total value in the billions — use ethereum.
“There’s never been, in the history of blockchain networks, a change on the scale of ethereum’s transition from proof of work to proof of stake,” says Chase Devens, an analyst at researcher Messari.
The Merge will be a nail-biter because a lot could go wrong. There could be software bugs or hacks, or miners could create an alternative ethereum network. During a 2020 network upgrade, a bug split Ethereum in two, wreaking havoc on its nascent DeFi ecosystem, the apps that let people trade, borrow and lend without intermediaries like banks.
Most centralised crypto exchanges are expected to pause ether withdrawals and deposits around the Merge as a precaution. DeFi apps may pause, too, if something goes wrong.
“With all technical upgrades of all these large chains, you need to use caution,” says Katie Talati, director of research at digital asset manager Arca. “At the end of the day, we are dealing with unknown technology.”
The miners are causing the most worries. Many may quit the network right before the Merge, figuring they can make more money by selling their gear than by waiting to get the last of the rewards. Too steep a drop in the network’s mining power, or the “hash rate”, could weaken ethereum’s security, spelling disaster for its token and the various apps using the network. Ethereum’s core developers have planned for that scenario. “If we see the hash rate dropping, we could pull the Merge forward,” says Tim Beiko, a computer scientist who coordinates ethereum developers. “All the software is built with an emergency option.”
Miners may also choose to fork ethereum, by taking the existing proof-of-work software and continuing to support it. That would create two different versions of ethereum that run in parallel: proof of work and proof of stake.
“We believe POW and POS will coexist for a period of time after the switch,” says Danni Zheng, vice president of BIT Mining, a mining provider that’s also expanding its staking services.
In this scenario, crypto exchanges and users could become confused about which chain’s ether they’re holding or trading. Two networks will mean more work for app developers, says Dieter Shirley, chief technology officer at Dapper Labs, the maker of an ethereum-based cat-breeding game, CryptoKitties.
“A contentious fork, it’s likely it would hasten our departure from the ethereum ecosystem,” Shirley says. Dapper may consider moving CryptoKitties to its own blockchain, Flow, he says.
A fork, or at least a lot of public criticism, is exceedingly likely because many ethereum miners don’t seem to know the Merge is coming. Ethereum developers communicate about the Merge on Discord and Telegram, messaging apps that many miners don’t use, Beiko says. Mining pools, which provide most of the transaction-ordering on ethereum today, take a percentage of the miners’ earnings, and it’s in their interest not to notify their members of the Merge so that mining continues at least until the network upgrade, he says.
“I am more concerned about the people who don’t even know this is happening, and they buy this $3 000 miner, and three months later it stops working,” Beiko says. “It would be a bad idea to start mining today.”
And some miners just don’t believe the Merge is really coming, because it’s been delayed in the past. “There’s a lot of scepticism because ethereum has promised proof of stake for five years,” Beiko says. “It’s hard to convince people that this time it’s for real.”
Shutting ethereum’s old chain will send shockwaves through the crypto-mining industry. Scrambling to find other uses for their equipment, miners will migrate their machines to other, similar chains such as dogecoin, litecoin, and monero. The hash rate on those other chains will balloon by five to 10 times overnight, says Sam Doctor, chief strategy officer at Bitooda, a digital asset fintech company. Overall revenue for this type of mining could drop as much as 90%, pushing many miners out of business, he says.
US miners will pursue clients outside the crypto industry, in areas such as artificial intelligence and genome sequencing, Doctor says. “But none of them have customer-acquisition experience.”
Investors may benefit from the Merge. The number of new coins issued on ethereum as rewards for ordering transactions should decrease by 50-90%, as the proof-of-stake chain will offer lower rewards, Beiko says.
In the next two years, the amount of ether that’s used for staking will probably increase from 8% to 80%, according to staking services provider Staked. That will reduce the ether in circulation, potentially pushing up its value.
Stakers will be able to use the ether they receive as rewards for ordering transactions, but not the ether that they stake — at least not until another software upgrade, expected six months or so after the Merge. Stakers are more likely to hold their ether for the long term than miners, who often need to sell some to cover electricity costs, says Kyle Samani, co-founder of Multicoin Capital.
After the Merge, the energy consumption of ethereum’s network should drop more than 99%. To order transactions on the new proof-of-stake network, a validator can use a high-end laptop instead of a server farm. The entire proof-of-stake ethereum is expected to consume around 2.62MW — about as much as a small town. By contrast, current proof-of-work setup gobbles up the energy of a midsize country.
“Even my daughter has picked up the ‘NFTs are boiling the oceans’ hysteria,” says Ben Edgington, lead product owner at ConsenSys, which builds infrastructure for the ethereum blockchain. “I expect that freeing ourselves from the negatives of proof of work will definitely help make applications like DeFi and NFTs much more socially acceptable, leading to significantly accelerated adoption.”
Much will depend on whether the Merge goes smoothly, of course. “If we do our jobs well, nobody will notice the moment that ethereum moves from proof of work to proof of stake,” Edgington says.
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
Both bitcoin and Ethereum are the two leading cryptocurrencies. This is why investors are getting attracted and a lot of them are making moves to buy bitcoin and Ethereum. It is an undisputed fact that two projects have great potential. Bitcoin is the first and largest decentralized virtual currency and has been in existence for over 11 years. Satoshi Nakamoto launched Bitcoin in 2009 to help alleviate the economic crisis that conventional banks caused across the globe.
Ethereum
Since the creation of Bitcoin, it has helped make transactions easier, faster, and cheaper. Over the years, there have been different speculations by naysayers that the cryptocurrency market will crash soon, on the contrary, the crypto market has been waxing stronger as the years go by. Bitcoin, Ethereum, and other cryptocurrencies will definitely be part of the future.
On the other hand, Ethereum was developed to be a better version of bitcoin in terms of scalability. Ethereum is more like a development platform. When Ethereum came into existence, a lot of people believed that it would be bitcoin’s biggest competitor. However, Ethereum has never been about the price, but it has been about the platform. Since its inception, the blockchain industry has gone beyond just cryptocurrency. Ethereum has made smart contracts, decentralized finance (Defi), and decentralized apps (DApps) possible. It is right to say Ethereum is more for designers and developers, and not just a coin that should be limited for transactions purposes only. Despite its wide usage for different things, it has attained a high price value and that makes it a potential and good investment option.
The history and performance of Bitcoin and Ethereum
The first Important point to note is that Bitcoin is the very first and the most popular currency in the crypto market. This is one of the reasons why it has always been leading the race in the crypto market. It currently has the highest price value and also the highest exchange rate against USD.
Additionally, BTC is the coin that most people look towards to determine the price of other cryptocurrencies. Bitcoin has also seen incredible bull runs. In 2020, Bitcoin reached an all-time high, going as high as $41,000. The last all-time high was far back in 2017 when bitcoin almost peaked at $20,000. The price and popularity of Bitcoin have made it overshadow every other cryptocurrency.
Another critical moment in bitcoin history is the massive bitcoin correction that took bitcoin’s worth from $20,000 in 2017 to a little above $3,000. When this happened, the media and the naysayers were buzzing about Bitcoin being a Ponzi. Some said Bitcoin is just a failed asset that might come to an end anytime soon. However, fast forward to 2021, Bitcoin surged to pass the all-time high of 2017, $20,000 and reached a new all-time high of $41,900 on the 10th of January 2021. The increase in price has made a lot of people more willing to buy bitcoin in South Africa. Recently, institutional investors like Grayscale are getting more interested in bitcoin and are putting more money in the bitcoin market. This has resulted in the scarcity of bitcoin and the corresponding price increase.
Tesla, an electric car production company owned by the renowned engineer and founder of SpaceX, Elon Musk has recently purchased $1.5 billion worth of Bitcoin. In addition to this massive purchase, Tesla plans to begin accepting Bitcoin from customers as payment for its cars purchase in the nearest future. This single action by Tesla has caused Bitcoin to break its all-time high and off to set a new one.
The best time to buy bitcoin was before now, the second-best time is NOW!
Ethereum
On the other hand, during the early days of 2018, Ethereum recorded its all-time high when it sold for $1,440. After the all-time high, Ethereum has also followed the correction trend. However, in 2021 ETH has hit a new all-time high and is currently trading above $1600. The Ethereum development team is currently working to making the Ethereum network more efficient, secure, and more beneficial by launching ETH 2.0.
Looking at the track record of both Bitcoin and Ethereum you would notice that they have both had good price trends and both have excellent use cases and value, which are criteria for good investments.
Bitcoin or Ethereum?
It is not easy to pick the best cryptocurrency to invest in 2021. This is because both bitcoin and Ethereum are in fact, great coins. Additionally, they have both got the huge potential of giving a good return on investment. Bitcoin had a good run in 2020, and we are expecting a bigger run in 2021. This means, more people will be willing to buy BTC, making it a perfect investment option.
After the bitcoin halving that took place on May 11th 2020, the surge in bitcoin has been incredible. BTC has gained more mainstream media attention and more institutional investors including phone company Apple are set to buy BTC. This is why a surge in the price of bitcoin is expected. There are also predictions from experts that bitcoin is nowhere close to its full potential, and it has the potential of growing stronger in 2021.
Ethereum, on the other hand, is the leading Altcoin. The Ethereum 2.0 project is another major talking point. This is because advancements like speed and scalability will bring more investors. Some people left ethereum due to the high fees, and some left due to the slow network.
However, the ethereum 2.0 project would address these issues and definitely attract more investors. With the implementation of Ethereum 2.0, ethereum would become faster, more robust, and a perfect investment option.
With the current price of Bitcoin, it is suitable for investors with large pockets and liquidity who can spend over 40,000 USD to buy bitcoin. However, investors with decent capital can start their crypto investment with Ethereum because it is relatively cheap.
Conclusion
If you buy or invest in bitcoin or ethereum, you are simply investing in the future of finance. None of them is a bad investment. People always believe that they’re rival projects and that one might end the other. The fact is, Bitcoin and Ethereum are different projects, with different goals and serving different purposes. You can make the easy decision to invest in any of the two assets. It is easy to buy BTC and ETH currencies as there are lots of exchanges that allow users to buy and trade cryptocurrencies.
Bitcoin transaction fees are way lower than Ethereum transaction fees. On the other hand, ethereum might not be as popular or expensive as bitcoin but it can also serve as a great investment asset. They also have some similar features, but their adoption and use-cases are reasons you would find them both as good investment options.
Adeogbo Adedolapo is of Remitano group
Kelechi Deca
Kelechi Deca has over two decades of media experience, he has traveled to over 77 countries reporting on multilateral development institutions, international business, trade, travels, culture, and diplomacy. He is also a petrol head with in-depth knowledge of automobiles and the auto industry
