How should the first phase to POS algorithm be launched? First, the official testnet, with concurrent support for major Ethereum clients, needs to run smoothly for 3 months. Given the launch date, we could see Ethereum 2.0 on November 4.
But on August 16, due to a glitch in the Prysm client, the testnet split into multiple chains. This led to the fact that out of 75% of validators who received a reward for confirming transactions, their number first dropped to 5%, and then to zero altogether:
Even Vitalik Buterin said after these events that he did not expect such a high level of complexity when switching to a new version of the platform. True, he believes in success and notes significant progress in recent years. Perhaps this was the reason for the decisiveness of the Ethereum developers, who believe that the failure that happened is not a reason to postpone the launch of Ethereum 2.0. Or they suddenly remembered that they had already missed a lot of deadlines.
At the same time, in October, developer Ben Edgington announced the launch of the Ethereum 2.0 deposit contract. According to him, the genesis block will appear on the network in six to eight weeks.
Surely, the launch of Ethereum 2.0 is urgently needed. But now we want to express one concern. Let’s go back to the summer of 2016, when, due to an error in the code of The DAO project, Vitalik Buterin and the company had to hard fork and roll back the blockchain, which led to the split of the chain and the emergence of the Ethereum Classic project, which is the original version of the blockchain.
Could it be that the rush now will lead to the fact that the issue will again have to be resolved in a radical way, and as a result we will again get the new Ethereum Classic 2.0? And how many problems can arise when transferring individual applications, it’s scary to even think.
As for the impact of the switch to the POS algorithm on the Ethereum price. Then, on the example of the growth of Cardano due to the activation of the extremely prolonged Shelley update, the price added almost 50%.
We are expecting an increase from 15% to 30% at this event is quite possible.
Why do we need Ethereum 2.0 so much? Why are Vitalik Buterin and the company willing to take the risk of a possible network split? Let’s take a look at the cost of transaction fees in Ethereum:
As you can see, at times transfers in bitcoin are cheaper and it is quite possible that soon ether will finally overtake Bitcoin. After all, its blockchain processes more and more transactions and the current level of network congestion is comparable to that of December 2017 and January 2018:
But if then it was a short-term peak caused by the rise in the price of Ethereum to a historic high of $ 1,400, now we are dealing with a systematic growth in popularity due to a record increase in the demand for transactions in stablecoins.
Which are actively used both in trading on cryptocurrency exchanges and in the sector of decentralized finance.
Note that fees have dropped significantly recently. But for how long?
The most popular stablecoin in general and on the Ethereum blockchain is USDT from Tether. And although they are not opposed to their stablecoin being on different platforms, it is most in demand on Ethereum.
But Tether is more of a story for exchanges, while DeFi users prefer algorithmic stablecoins, such as DAI from the Maker project.
The future of Ethereum prices directly depends on the bitcoin rate. Of course, local growth is possible, as discussed above, but globally, the point is precisely in Bitcoin.
In turn, the transition of Ethereum to the new version will be able to raise the price of the coin to new heights. But this transition can take years, so we are watching the first cryptocurrency and how Ethereum follows its path.
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