The launch of Ethereum 2.0 is expected to radically boost the cryptocurrency further and change the face of ETH, and even crypto trading forever.
While the crypto trading world was busy following the Bitcoin price fad, the world’s second-largest cryptocurrency, Ethereum, got a major upgrade. Our favorite ‘world computer’ began its long-awaited overhaul as the first stage of the next-generation PoS (Proof of Stake) Ethereum 2.0 Beacon chain went live on December 1, 2020.
Clearly, the market has been waiting. Ethereum price has soared by 350% since the start of the year. For the first time since June 2018, we saw Ethereum’s price cross $650 in December 2020 post the launch. The Beacon chain is the first addition to the Ethereum ecosystem, and more upgrades are in the pipeline.
The Eth2 upgrade isn’t a migration or a singular phenomenon. Instead, it is a set of upgrades being worked on to unlock Ethereum’s true potential. Eth2 will improve the scalability, security, and sustainability of the network. The 2.0 version of the coveted crypto asset has wide implications for innovative crypto trading platforms like ours — Giottus — in the near future. We’re quite excited with the Eth2 buzz!
A Brief History: Highs and Lows
Ethereum was launched in 2015 by the Russo-Canadian developer Vitalik Buterin who also founded the Bitcoin Magazine and was a member of several alternative cryptocurrency projects. Buterin envisioned Ether on the lines of Bitcoin’s blockchain architecture but having multiple functionalities beyond hosting digital currencies. The second-largest virtual currency in the world by market cap, Ether, supports Smart Contracts, Tokenization and Distributed Applications that allow several revolutionary functionalities:
- Any application or process, transaction or mechanism can be run with no downtime.
- No interference or third party involvement on the Ethereum Blockchain helps eradicate fraud.
- It has extensively been used as a primary funding mechanism by the Initial Coin Offerings(ICOs) that employ ERC-20 standard tokens for crowdfunding their projects.
ETH price in India peaked to $1412 in 2018 while 2019 saw a relapse in Ethereum price to $132 after a prominent Bitcoin breakdown. However, it is notable that Ether’s price trajectory is much more stable and impressive than BTC. Exchanges like Giottus provide high liquidity and the best Ethereum price in INR to their investors.
The Launch of ETH 2.0
“It’s a little bit like the launch. The rocket is now taking off. We’ve committed to the journey. We’re still on the launchpad, but all will be achieved when we land on the moon. At this point, we’re launching the official end to the old Ethereum.” — Konstantin Richter, CEO of blockchain software firm Blockdaemon
The Beacon Chain is the first phase in the 2.0 upgrade that has officially marked the end of ETH1.0 era. This upgrade will function in parallel to the existing Ethereum Blockchain until further upgrades under version 2.0 are launched. Beacon Chain, as the first addition to the ETH ecosystem, brings staking to Ethereum, lays the foundation for future upgrades and will be eventually responsible for coordination in the new system.
Ethereum Foundation researcher Danny Ryan calls the launch as a ‘huge accomplishment’ that lays ‘the foundation for Ethereum’s more scalable, secure, and sustainable home.’ There are two more updates lined up:
- 2021 is estimated to be the launch year for Shard Chains (rolled out in multiple phases) that will expand Ethereum’s capacity to store data and process transactions.
- Under ‘The Docking’, Mainnet Ethereum will finally merge with the Beacon Chain, enabling staking for the entire network while putting an end to energy-intensive mining in the coming year 2022.
Future: Scalability and Profitability
The Beacon Chain will be the backbone of the Ethereum Blockchain, bringing its processing speed at par with the likes of Paypal and Visa while providing the add-ons of transparency and payment finality. It is expected that the new upgrade will allow thousands of transactions to take place on the Ethereum blockchain every second. This utility can have mind-boggling implications in the wake of DeFi platforms gaining momentum.
DeFi is now a complete financial ecosystem, with half of the locked-up tokens being ERC-20 based. Crypto Experts predict that Ethereum could become a fundamental skeleton for a decentralized next-generation online platform. At Giottus, we consider the development to be conducive to greater crypto adoption in the future.
Another brilliant use case of ETH 2.0 is, of course, is ‘staking’. Staking is a kind of passive investment where investors earn interest on their Ethereum investment after a certain period. Staking would imply locking up the asset leading to restricted Ether supply in answer to increased demand. This might push the Ether prices further up in the coming years.
A shift from PoW to PoS consensus implies better security and scalability, with stakers taking over from the miners in continuing the Ethereum Blockchain. Indeed, more and more Ether is being put away by crypto investors intending to become validators of transactions on the new network. Currently, 2.5 million ETH is locked up, which is 2.25% of the entire supply.
ETH 2.0 will help overcome the bottlenecks such as congestion due to increased usage and increased average transaction fees in the previous version. Given the agility and speed of the new network, Ethereum will be able to support apps with millions of users and bring the decentralized platforms at par with the centralized ones. With the existing correlation between Defi and Ethereum, the launch is expected to boost the cryptocurrency further and change the face of crypto trading forever.
Ethereum continues to be the largest general-purpose Blockchain network supporting over 1,400 projects and deploying over 200,000 developers. With 2.0 upgrade in place, ETH is all set for a bullish price run and bolstered Blockchain adoption by the masses at large. Start your ETH trading here!