Mergers are just a stepping stone” Ethereum (ETH) narrative and opportunity, just beginning

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Mergers are just a stepping stone” Ethereum (ETH) narrative and opportunity, just beginning
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Ethereum (Ethereum) has grown into the king of a dominant public chain after 8 years of growth since 2013. What are the brilliance worth remembering? What to look forward to after the merger? We’ll take you through it today. (Recap:The Ethereum merger is completed, officially moving towards PoS! Buterin: This is a historic moment in the ETH ecosystem) (relevant additions:8 Years of PoW Comes to an End” A Brief History of Ethereum: Buterin, China’s Mining Industry, and NVIDIA)

doAs the infrastructure of the blockchain industry, the public chain has always been one of the topics that cannot be avoided in the field of encryption. With the development and rise of public chains from generation to generation, ecological crazes such as NFT, DeFi, GameFi, and Metaverse have also ushered in an outbreak. In turn, the outbreak of these track projects has also promoted the development and value enhancement of the public chain.

From 2013 to the present, Ethereum has grown into a dominant public chain king after 8 years of growth. What are the brilliance worth remembering? What to look forward to after the merger? The vernacular blockchain will take you to sort it out today.

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In late 2013, 19-year-old Vitalik Buterin sent his friends a white paper that mentioned designing a new Bitcoin. This new Bitcoin will be based on a common programming language and will be used to create a variety of applications, such as social networking, trading, games… As we all know, Ethereum founder Vitalik was originally an engineer in the Bitcoin community. A scripting language for application development on Bitcoin was proposed to the Bitcoin community, but it was not agreed, so he turned to a new platform with a more general scripting language, Ethereum.

At the end of 2013, 19-year-old Vitalik sent a white paper to his friends and sent the white paper to 15 people, who in turn sent it to their friends. One pass, ten pass, one hundred, Vitalik’s idea quickly exploded in the Bitcoin community.

I thought that there were still many loopholes in my ideas, but who would have thought that it would be well received. There are even many people who are so excited about this avant-garde idea that they come to the door in person and hope to cooperate with Vitalik.

And Vitalik had just won the $100,000 Thiel Scholarship (a scholarship for Paypal founder and Silicon Valley investment boss Peter Thiel to encourage young people under the age of 20 to start businesses), and this money was used to get the money before it got pocket heat. Switzerland develops Ethereum company.

Then, in 2014, in order to obtain development funds, the Ethereum team publicly raised funds by exchanging Bitcoin for Ethereum, which was later popular ICO (Initial Coin Offering). At that time, a total of 31529.36369551 bitcoins were raised, and a total of 60102216 Ethereum were sold, which was worth $18,439,086 at the time. Proceeds from the sale are first used to pay off mounting legal debt, reward developers for months of hard work, and fund the continued development of Ethereum.

Afterwards, Ethereum was transformed into a non-profit organization “Ethereum Foundation (Ethereum Foundation).”

Ethereum Development Program

In 2013, it was the stage when Vitalik designed the Ethereum protocol architecture.

In 2014, it was the stage of raising partners to realize the structure. In April of the same year, the Ethereum Yellow Paper was released, which marked the completion of the prototype design of the Ethereum system.

On July 30, 2015, the Ethereum public chain was launched. The original version of Ethereum, called Frontier (also “forward”), used a proof-of-work algorithm. Ethereum is not yet mature at this time, but basic mining, learning and experimentation can be done.

After the system runs, it has attracted more people’s attention and participated in the development. As an application platform, Ethereum also needs more people to develop their own decentralized applications to realize the value of Ethereum itself. As popularity grew, so did the value of Ethereum.

On March 14, 2016, Ethereum forked the second time and released the first official stable version, called “Homestead”, 100% PoW mining was adopted, but in order to prevent miners from boycotting Ethereum in the future The Square has been upgraded from PoW to PoS, and a difficulty bomb has been deliberately introduced into the mining difficulty design.

In May 2016, Ethereum received a lot of media coverage when The DAO project raised a record-breaking $150 million in a 28-day global crowdfunding campaign. In June 2016, hackers launched an attack against multiple vulnerabilities in The DAO smart contract.

sparked fierce debate in the community. In July 2016, due to the attack of the previous month, the hard fork plan was announced. More than 85% of the computing power supported the hard fork. The Ethereum hard fork was successful, and the network was separated into two different groups: Ethereum (ETH) and Ethereum. Square Classic (ETC).

In 2019, Ethereum’s plan to implement the Constantinople hard fork was unanimously agreed, a bomb code that stimulated the Ethereum network to change its core consensus mechanism algorithm. Once the bomb goes off, it will send Ethereum into an ice age. In the future, the difficulty of creating blocks on the Ethereum network will continue to increase, making the block production speed continue to decrease, and eventually slow down to a complete stop. Thus forcing the switch to Pos consensus.

When Ethereum is upgraded to Serenity version, PoS will be completed in Ethereum, Ethereum will be quiet, and it will have a good transaction speed, which can be regarded as the last milestone. As we all know, it was completed on September 15.

Ethereum’s Vision

As the leader of the public chain, Ethereum has far surpassed other public chains in terms of market value and transaction volume.

So why upgrade to Ethereum 2.0?

First of all, from the beginning of its establishment to the present, the transaction on the Ethereum chain has increased by a thousand times. The highest daily transaction volume is nearly 1,300 times that of the lowest transaction volume. The growth rate is extremely fast. The high growth of transaction volume also makes the demand for Ethereum high. increase. Secondly, as a platform for carrying users and applications, the commercial value of the public chain is the foundation of the existence of the public chain. However, the shortcomings of Ethereum’s low efficiency and high exchange fees have always been criticized. However, the role of the public chain in the underlying infrastructure of the blockchain industry has caused many other giants to scramble to attract traffic. At present, the competition pressure is relatively high.

Therefore, if Ethereum wants to solve these problems more thoroughly on the basis of ensuring security, it still has to solve it from the root, that is, to improve and solve this problem from within the Ethereum public chain. Therefore, whether from an external or internal perspective, the Ethereum upgrade is a rigid need.

Although the “Ethereum merger” is one of the important steps in the Ethereum upgrade process, it is highly anticipated by the industry. However, the “merger” is not the final upgrade of Ethereum. Ethereum officials said that the future upgrade of Ethereum needs to complete three stages, namely: beacon chain, merger and fragmentation.

Ethereum Upgrade Roadmap
Ethereum Upgrade Roadmap

Beacon chain

Beacon Chain was officially launched on December 1, 2020.

Beacon Chain is a blockchain based on PoS consensus, which will provide a consensus basis for the entire Ethereum network and pave the way for subsequent shard chain upgrades.

Users can pledge ETH to the beacon chain deposit contract. However, it should be noted that the ETH pledge in the beacon chain deposit contract is one-way. It is expected that users will be able to retrieve the pledged ETH principal and income only after the Shanghai upgrade opens the transfer function within 6 to 12 months after the merger.

The Merge

The Ethereum mainnet has completed its merger with the Beacon Chain on September 15, 2022.

Merger refers to upgrading the Ethereum main network from the PoW consensus mechanism to the PoS mechanism, becoming a shard chain and connecting with the beacon chain. This will guarantee the stake of the entire network and mark the end of energy-intensive mining.

Sharding

Expected launch time: 2023-2024

Extend Ethereum’s ability to process transactions and store data by extending the network to 64 sharded blockchains, and work with Layer2. Meanwhile, sharding will be rolled out in multiple phases, designed to improve Ethereum’s scalability and capacity.

Ethereum’s achievements

The first public chain of the blockchain, ecological applications continue to prosper.

As the oldest public chain project, Ethereum carries most of the ecological applications. Currently, the total value (TVL) locked on the Ethereum chain accounts for more than half of the TVL of all public chains. And there are more than 5 DeFi projects with a market value of more than 1 billion on Ethereum, such as MakerDAO, Convex Finance, AAVE, Uniswap, Lido, etc.

Secondly, after the emergence of smart contracts, the topic of when Ethereum can surpass Bitcoin has never been interrupted, but Bitcoin has not made much progress in terms of technological upgrades except for the value storage role of “digital gold”. But the ecology on the Ethereum blockchain has been developing in full swing.

Ethereum 2.0 was successfully merged, and the technology was further upgraded

The stable and rapid development of the Ethereum ecosystem is mainly due to its strong technical foundation and economic mechanism, as well as its strong consensus in the blockchain field, which makes most projects willing to prioritize the layout in Ethereum superior.

In turn, the explosion of these ecological applications has also further enhanced the value of the Ethereum public chain. ETH has naturally become one of the first choices for many retail investors to choose the asset target of public chain projects, and has also been recognized by more and more mainstream institutional investors.

In an interview the other day, Vitalik was delighted with the just completed Ethereum 2.0 merger, saying:

“This is a transition that the entire Ethereum community has been working on for the past 8 years. There are a lot of people (whether from the Bitcoin community, or crypto skeptics) who are skeptical along the way. Whether or not the merger will happen, aka the switch to PoS. We’re happy to finally prove them wrong.”

There is no doubt that this major upgrade of Ethereum has paved the way for more technological changes and wider adoption, and the improved way transactions are verified on the Ethereum blockchain after the merger has not made the current prospects of crypto applications and their The blockchain technology on which it is based has become more complex. This long-delayed upgrade is one of the big moments not only for Ethereum but also for the crypto space, and will bring major upgrade changes in the future.

Ethereum’s follow-up plans

According to the roadmap released by Ethereum founder Vitalik in December 2021, the future development of Ethereum needs to achieve five goals, namely:

The Merge: The consensus mechanism is changed from POW to POS, reducing energy consumption and laying the foundation for subsequent fragmentation and data optimization The Surge: Fragmentation, increase TPS, reduce Gas, and improve scalability The Verge: Introduce Verkle tree, Optimized data storage The Purge: Simplifies storage, reduces validator hard drive space performance requirements, and reduces network congestion The Splurge: A series of small upgrades to ensure that the above upgrades can run smoothly

Ethereum upgrades include the existing Beacon Chain (already implemented), Merge (Merge implemented), Surge, Verge, Purge, and Splurge, among others. After all the upgrades are deployed, the new Ethereum blockchain is expected to achieve improvements in scalability, security and sustainability while maintaining decentralization.

Note: The Merge, The Surge, The Verge, The Purge, The Splurge are not in strict order, they are performed at the same time, and the Merge is the first step to complete.The words Merge, Surge, Verge, Purge, and Splurge are mainly used to rhyme, so they cannot be taken literally.

According to this plan, Vitalik said in a conversation with Circle CEO Jeremy Allaire at the Converge22 conference just held by Circle that the next step for Ethereum after “The Merge” is scalability.

One way is through “layer 2 projects” that sit on top of Ethereum. Vitalik said:

“The merger makes it easier to build these “layer 2 platforms,” ​​which are more scalable Ethereum-like networks that use the blockchain in a more “optimized and smarter way,” reducing the cost.”

One is the planned “sharding,” a multi-phase upgrade that promises to increase the scalability and capacity of Ethereum and enable layer 2 solutions to offer low transaction fees while leveraging the security of the underlying Ethereum network .

“The ability of the Ethereum ecosystem to absorb and process transactions will increase by a factor of 100 to 1,000, which is going to be a big deal.”

By being scalable and enabling the chain to handle more data, Vitalik hopes to make direct interaction with the Ethereum blockchain more attractive.

summary

As the public chain with the most influence and the most developers in the blockchain world, every move of Ethereum will undoubtedly have a huge impact.

Now with the arrival of Ethereum 2.0, the development of the public chain has entered a new chapter. The problems of low performance, high cost, and high energy consumption that have plagued Ethereum users for a long time are expected to be solved through a series of upgrades. Let us continue to look forward to the next upgrade plan.

📍Related reports📍

After the completion of the Ethereum merger, where will the separated PoW and PoS communities go?

Buterin Viewpoint” My influence on Ethereum has been declining; PoS is 20 times more secure than PoW!

Vitalik wrote “The Vision of Ethereum Layer 3”: What kind of L3 is reasonable? Don’t Repeat Stacking Rollups (Full Text)

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