Ethereum progress and the future adoption
Since its creation, the Ethereum was the backbone code for hundreds of new tokens and applications.
The major contribution of the Ethereum was its role as a contract standard, but we have all heard there are issues with the code that needs to be resolved before the mass adoption. The following article will try to explain how far is the progress of the Ethereum and ultimately try to find an answer of the question – when we will see mass adoption.
Let’s cut to the chase, I think the Ethereum protocol is not ready for mainstream adoption. It’s good that in the last 2 years of the ICO boom, it was tested what the effect is on the blockchain when many transactions are executed on a short time frame. Yet in order to have mass adoption, the protocol itself needs time to find scaling solutions. For me, PoS (Proof of Stake) and Sharding are the key developments that need to be done in order to find these solutions. Regardless of the price and current adoption, these developments will need their respective time.
Diffrence between mining and staking
The current mining algorithm is called PoW (Proof of Work). It is based on the idea that a machine does a very difficult computational mathematical problem and for the “work” performed, the “miner” is awarded a reward (Ether). This is currently a slow, inefficient and non-eco-friendly method of supporting the network. Moreover, when you add the electricity bill and the time to “mine” 1 Ether, it comes up to a not so good financial investment (as you need special equipment, electricity bill, etc.).
What does this mean for the network?
In PoS, participants “stake” their coins (Ether in this case) on the network in order to achieve consensus. Essentially, a participant is putting up his own coins as collateral against the event that he tries to add false information/cheat.
So while Proof Of Work disincentives bad actors because of the tremendous power/electricity that would be consumed (at their cost) – Proof of Stake disincentives bad actors by making them risk their own wealth.
The major milestones
Last year, two major upgrades/milestones were planned in the roadmap – Metropolis and Serenity.
Metropolis was divided into two phases:
Phase 1: Byzantine
The Byzantium update would bring privacy improvements. It took place on the Ethereum chain last year.
Phase 2: Constantinople
PoW/PoS Hybrid (Casper FFG). Constantinople was supposed to happen earlier this year (Q1 2018). But all priorities were shifted to rolling out Proof Of Stake & Sharding as soon as possible.
Up until June 2018, Constantinople’s Casper FFG was still in play. However, that plan is now being dropped as well – for something more clean and efficient (Casper V2).
Casper V2 will be implementing a “beacon chain” – onto which Casper and Sharding will be merged.
This does not mean that Casper and Sharding will be launched on the beacon chain together. It simply means that Casper and Sharding will be implemented on the same chain. So, Casper could come first, and Sharding be implemented much later. Or vice-versa.
Think of Casper and Sharding as you and I going for a beer in the pub down the road. To get there, we both have to go via the same road at some point. We cannot say whom will “step” on this road first but we simply know that:
1. You and I are going there.
2. In order to get there efficiently, we need to go via this specific road.
3. You and I both need eventually to arrive in the pub.
Similarly, Casper and Sharding are two independent projects. Either could be completed first. This unified approach will allow for a minimum staking requirement of 32 ETH deposits. Below is an overview of how the staking can look like based on the number of Ether staked to secure the network (bear in mind, there are around 100 mil Ether planned for the network and realistically everything below 2% interest will not be worth the hassle for the people staking):
The initial plan was to roll out Casper FFG as a hybrid PoS/PoW. Casper FFG would have Proof of Stake (PoS) but would not have Sharding. With the PoS release, Validators would be allowed to deposit ETH in order to stake. This wasn’t ideal because it would entail a lot of centralization (with the Casper V1 the min staking amount was 1500 ETH that leads to the centralization).
In 2018, the need for scaling became increasingly urgent. The Ethereum team shifted all focus to the key releases that would move the needle toward scalability; namely, the PoS release and Sharding release. Casper FFG was to be the first PoS release, but would still use the PoW chain. This release date was estimated to be somewhere in 2018. The team was to release Sharding after PoS.
Casper FFG allows Ethereum to release a PoS quicker. However, it would entail “double work”. Since Ethereum would have to eventually release/migrate to a pure PoS chain. Because of this, they decided to scrap working on Casper FFG. They will now be working toward releasing Casper V2 – which will have PoS on the beacon chain as well. Since Sharding will be implemented on the beacon chain as well, it allows Ethereum to have a unified approach for their releases.
Unfortunately, this pushes back the release date for Ethereum Casper V2 to around 2019-2020. Sharding will be released on the same beacon chain that will be used by the PoS release. This does not imply that Casper and PoS are coming together. I would estimate its release date to be in 2020. But there’s a possibility that it may beat the PoS to the release finish-line.
Why Ethereum is still valuable
First of all, the new roadmap (Ethereum 2.0) has been published recently here. Despite that what is known as Shasper (Sharing & Casper) is going to take a while longer, the new roadmap is well-planned and if successful it will definitely solve the scaling issues.
In addition, their wallet UX is getting better. Much better. Improvements on usability, security, UX and UI are all present.
More and more Ethereum clients are being developed. The past few months have seen the introduction of Nimbus, Pantheon, and, most recently, Lighthouse, joining an ever-growing list of now more than 10 client implementations. These clients are also increasingly being developed by large, professional, well-funded teams. Each of these clients optimizes for something slightly different: Nimbus, for example, is optimized for resource-constrained devices like mobile phones, while Pantheon is designed to be fully modular and is built in Java to support enterprise use cases. More clients, more developers, and more researchers mean more diversity in opinion, more decentralization in research, roadmap, and development, and more resilience against a bug in any individual implementation.
Last but certainly not least, there’s the Ethereum community, which has exploded over the past year. The global Ethereum community the past year that it is extremely healthy and continually growing. The community is about more than cool technology: it is taking on more and more of the characteristics of a fully-fledged social and even political movement. As the first “Ethereum killer” chains begin to launch over the next few months and advanced blockchain technology increasingly becomes commoditised, I feel strongly that the size and strength of the Ethereum community will continue to set it apart for the near future.
To conclude, there is still a long way (and everyone should be aware) to mass adoption of this technology. The Ethereum need to find its solutions and improvements for usability, security and especially scalability. However, there are visible and noticeable steps in the right directions with already working projects in the ecosystem. The EEA alliance is constantly growing and new clients are onboarding. The new roadmap introduced new milestones and more steps for the main goal, but I am confident that once reached, the mass adoption will be inevitable.