CRYPTO MOVERS AND PRICES
The crypto market is acting as it has all week with bitcoin below USD 11,000 and other coins mixed. Volumes have been similarly consistent and are about 60% of a shrinking 30-day average.
CRYPTO STORY OF THE DAY
Ethereum creator Vitalik Buterin recently published a post on a popular Ethereum forum, expressing a vision for the protocol as the network approaches its transition to proof of stake (PoS). Buterin wrote that scalability brought by Ethereum 2.0 (ETH 2.0), the PoS version of the network, for applications is years away. This is due to the fact that technical changes brought by ether2.0 will take time to implement in such a way that every app on the network has access to cheaper and more efficient transaction processing.
As a work-around, Buterin suggested that Ethereum adopt a “roll-up centric” approach to solving scaling issues in the medium term. Roll-ups represent a wide ranging group of technical approaches to Ethereum scaling via side chains or layer 2 networks. These side chains speed up transacting through measures such as data compression and communicate transactions in batches to the main Ethereum network. This takes the strain of transaction processing off of the main Ethereum chain and puts the focus on roll-up networks.
While Buterin doesn’t offer a concrete timeline for his vision, one can assume the roll-up centric approach to last several years, at least until the scaling benefits of ETH 2.0 are available to all the network’s applications. The roll-up approach would require infrastructure adjustments. For example, roll-up networks should be integrated with popular ETH wallets, such as Metamask. Transfers between the networks would also “need more work,”according to Buterin. Buterin’s post comes on the back of technical difficulties suffered by the Spadina testnet, considered to be a crucial step towards ETH 2.0. While testnets are designed to explore technical challenges, and difficulties are to be expected, Spadina’s issues still push back an ETH 2.0 launch. Spadina has also led to Etheruem’s engineers to launch Zinken, which aims to address some of these technical challenges.
In late September we wrote that there appears to be an "inherent contradiction within current Ethereum development." We described that the proliferation of layer 2 solutions, such as the OMG network which hosts tether, cannot coexist with ETH 2.0, as that PoS-iteration of the network essentially aims to make layer 2 solutions obsolete. Under such circumstances, the chance of a hard fork increases as competing visions for the network emerge. It seems as though Buterin was seeking to at least address such concerns. He does successfully highlight the uncertainty of what Ethereum will look like from the medium term to long term. That said, introducing a new concept like this roll-up solution only adds an additional complicator for developers which further clouds the vision around what the protocol will look like in the future.