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Will We Still Need Interoperability Bridges When Ethereum 2.0. Launches?

Will We Still Need Interoperability Bridges When Ethereum 2.0. Launches?

If the long-awaited ETH 2.0 lands in July as promised, it will mark almost exactly five years since the world’s first smart contract platform launched in July 2015. The upgrade will introduce significant constraints on supply. These include a new cap on issuance, but it will also lock up substantial quantities of ETH as stakers compete for rewards in the new proof-of-stake consensus model.

Excitement is already building, with many analysts predicting an epic bull run on ether. Analyst Adam Cochran took to Twitter in a lengthy tweetstorm, summed up in a blog post in which he argues that Eth 2.0 “could prove to be the largest economic shift in society.”

Locking up tokens through staking serves the network well. A platform that has found it necessary to upgrade due to scalability constraints will benefit from having fewer ethers in circulation to pay gas fees. In turn, more competition for ether may also help to reduce the kind of network overload for which the first version of Ethereum became well-known. 

Interoperability - A Welcome Relief to Ethereum’s Scalability Challenges

The long wait for ETH 2.0 has also led to many projects developing their own workarounds to the scalability problem. Ethereum is the biggest smart contract platform in terms of developer activity, running over eight times the number of dApps than EOS, the nearest competitor. Enticing developers to a new platform was always going to be a challenge, which is why so many competitor platforms to Ethereum struggle to gain traction. 

Instead, 2020 has seen an increasing focus on interoperability, allowing developers to cherry-pick the best parts about different platforms. In particular, the introduction of bridges has enabled developers to continue building on Ethereum while benefiting from the faster throughput of other networks. 

Bridging the Gap to High Throughput

The first platform to launch its own bridge this year was Syscoin, back in January. Syscoin has been around even longer than Ethereum, with the first version of the platform launched in 2014. However, unlike Ethereum, Syscoin has been continuously iterating over the years, with the latest version, Syscoin 4.0, introducing the Z-DAG layer. The Z-DAG is based on a directed acyclic graph structure, which enables an extremely high throughput of up to 60,000 transactions per second, as verified by a third-party auditor

The Syscoin bridge allows Ethereum developers to access this speed while maintaining security and decentralization for their own dApps. The bridge means developers can program their dApps to send tokens back and forth between the Ethereum and Syscoin networks without changing the overall supply, thanks to a two-way mint-and-burn mechanism. Bridge activities are overseen by incentivized nodes called Bridge Agents. 

Using Bridges to Spread the Load

Syscoin was the first to introduce this functionality, but others are now following. One of the most interesting cases is Tether. In April, Tether announced that it is launching an EOS-Bitcoin bridge and will soon launch a similar feature between EOS and Ethereum. Although Tether migrated from Omni to Ethereum in 2017 as a means of overcoming the congestion on the Bitcoin network, it’s now suffering the same issues with Ethereum. 

It’s an ironic twist, though, that Tether has become the victim of its own popularity. Tether is currently the biggest hog of Ethereum’s processing capacity, accounting for over half of all transactions. Last year, some users even complained that transactions were taking days due to a backlog of Tether transactions. Therefore, the company now sees the opportunity of using bridges to spread the weight of transaction processing across multiple platforms. 

Will ETH 2.0 Negate the Need for Bridges?  

It would be easy to think all these problems will be solved by July. After all, most Ethereum fans have been waiting years for this update, which is allegedly intended to solve the scalability challenge. 

Unfortunately, it seems unlikely that Ethereum’s scalability woes will be solved any time soon. The update for July is only phase 0, and it will be phase 2 before any real scalability comes into play. Much of phase 2 is still under research, and not yet in development. Therefore, we don’t have any concrete numbers to work with in terms of transaction processing capability. 

Furthermore, both Tether transactions and DeFi adoption are growing fast. By the time ETH 2.0 is fully live, who knows whether or not it will be in a position to handle the increased demands on the Ethereum platform? 

With all this in mind, it seems fair to assume that ETH 2.0 isn’t going to negate the need for interoperable bridges any time soon. Ethereum has struggled to keep pace with innovations in blockchain technology, and other platforms are likely to retain their edge even as the Ethereum team is working to stay up to date. While Ethereum can retain its crown as the most-used platform, it’s inevitably going to thrive better as part of an interoperable blockchain ecosystem.

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The benefits of Ethereum 2.0 will come sooner rather than later according to Vitalik Buterin

The benefits of Ethereum 2.0 will come sooner rather than later according to Vitalik Buterin

Quick take

1 minute read

  • Vitalik Buterin, has recently answered a number of questions from the community as a part of a “ask me anything“ session on Reddit. 
  • The co-founder highlighted many different topics but specifically said that he expects some significant and noticeable network improvements to come for the project sooner rather than later. 

Vitalik Buterin, the co-founder of one of the biggest crypto projects in the industry known as Ethereum has recently answered a number of questions from the community as a part of a “ask me anything“ session on Reddit. The co-founder highlighted many different topics but specifically said that he expects some significant and noticeable network improvements to come for the project sooner rather than later. He further said:

“TLDR: merge happens faster, PoS happens faster, you get your juicy 100k TPS faster.”

Over the years, the network for Ethereum has experienced some significant rounds of high congestion. Three years ago in 2017, the popular CryptoKitties game slowed down the network massively but with the decentralised finance space growing rapidly, the network has been seriously clogged up.

As a result of this, it has led to high fees and longer than average confirmation times.

With Ethereum 2.0 very much just around the corner, there is a significant scaling upgrade solution that is supposedly going to speed up the network rapidly. This will increase the number of transactions per second and it will also move the blockchain to a different consensus algorithm known as a proof of stake. Phase 0 for the upgrade is set to occur on the 1st of December in two weeks!

The co-founder further went on to say that “all of these changes are designed to decrease the time until eth2 becomes useful to people.” 

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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The second richest man in Mexico invest 10% of his portfolio into BTC

The second richest man in Mexico invest 10% of his portfolio into BTC

Quick take

1 minute read

  • Ricardo Salinas Pliego is the second wealthiest businessman in Mexico and the 166th richest man in the world. 
  • It was recently announced last week that he has invested 10% of his liquid portfolio into the leading cryptocurrency, bitcoin. 

Ricardo Salinas Pliego is the second wealthiest businessman in Mexico and the 166th richest man in the world. It was recently announced last week that he has invested 10% of his liquid portfolio into the leading cryptocurrency, bitcoin. This came after he shared a video throwing huge amounts of paper money into the garbage. Not only does it show how worthless the government-issued cash is in today’s world but it also shows how important digital assets such as bitcoin could become.

Furthermore, the video indicates the hyperinflation and how bad it got in Venezuela.

Ricardo is worth more than $11 billion at the time of writing and is the only billionaire from Mexico who seems to have benefited from the coronavirus pandemic and the economic crisis that has come as a result.

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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Coinbase co-founder, Fred Ehrsam set to join Fireblocks as a member of the board

Coinbase co-founder, Fred Ehrsam set to join Fireblocks as a member of the board

Quick Take

1 minute read

  • Fred Ehrsam, the co-founder of the crypto platform known as Coinbase is getting ready to join the digital asset security platform Fireblocks. 
  • It was announced last week that Fred would be joining the board following a recent round of funding.

Fred Ehrsam, the co-founder of the crypto platform known as Coinbase is getting ready to join the digital asset security platform Fireblocks. It was announced last week that Fred would be joining the board following a recent round of funding.

The co-founder of the well-known crypto platform is getting ready to join the company as a board member following a $30 million funding ground to help expand its operations on an international level.

Throughout 2020, Fireblocks has launched a secure asset transfer network which would allow more institutions to efficiently transfer assets on chain. And on top of this, the platform also announced that it has seen more than $150 billion in transferred assets over the course of the past year. Fred has said:

“Fireblocks has become the go-to for any business looking to build new digital asset operations or scale existing ones… The extraordinary growth of the Fireblocks Network and its team in the last year attests to the enormous value they have unlocked for enterprise and institutional customers.”

 

For more news on this and other crypto updates, keep it with CryptoDaily!

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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XRP Price Analysis: XRP Continues Correcting

XRP Price Analysis: XRP Continues Correcting

This analysis brought to you by RoboForex.

On Friday, November 27th, XRP has reached stability but is still correcting and trading at $0.5550.

As we can see in the daily chart, after finishing a quick rising wave, XRP/USD price is correcting to the downside. At the moment, the asset is trading close to 61.8% fibo, a breakout of which will indicate further pullback towards 50.0% fibo. The MACD histogram has broken 0 and is still moving to the upside – it may be another signal in favor of a new rising impulse. The upside target of the completion of the correction will be at 0.6800.

In the H4 chart, the cryptocurrency continues correcting to the downside. Right now, it is testing the support level, a breakout of which will result in further decline towards 50.0% fibo. The Stochastic indicator has formed a “Black cross” inside the “overbought area” and is still falling, which is an additional signal in favor of further decline towards 50.0% fibo. After completing the correction, the asset may test and break 61.8% fibo, and then continue trading upwards. The upside target is similar to the daily chart, 0.6800.

Ripple started its rally on November 20th, together with other cryptocurrencies. There are a lot of explanations of why it happened, from investors’ search for alternatives to fiat instruments to a surge in interest in cryptoassets from institutional players. Indeed, all of this really took place and, of course, expansion of the interest was in favor of cryptocurrencies. The entire market is on the rise but since “trees don’t grow sky-high”, active purchases faded to the correction.

Over this period of time, XRP has managed to update its high reached in May 2018. The asset is still moving like 80% below the highs of January 2018, when it was trading at $3.7, but investors are surely positive about further growth.

At the moment, XRP is back to third place in the list of the strongest and most popular cryptoassets.

By Dmitriy Gurkovskiy, Chief Analyst at RoboForex

 

Disclaimer

Any predictions contained herein are based on the author's particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein.

 

© 2020 CryptoDaily All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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