Ethereum 2.0 recently started its beacon chain, completing phase 0 of a scalability that has been in the works for years. Although he expressed his confidence in Eth2, the CEO and founder of Celsius, Alex Mashinsky, You think the network could lose your attention if it doesn’t scale quickly and significantly.
“Ethereum needs to demonstrate that it can scale its transactions 100 times without compromising security or decentralization,” Mashinsky told Cointelegraph when asked about Eth2’s next hurdle after the Beacon Chain was launched. “If he can’t scale, Cardano and Polkadot will take over.”
According to data from Blockchair, the Ethereum network will host around 13 transactions per second (TPS) as of Thursday. A 100 fold increase from now on would be approximately 1,300 TPS.
Ethereum has been the network of choice for building decentralized applications in recent years. In 2020, the rise of decentralized financing (DeFi) also largely took place at Ethereum. This increase in activity has resulted in high traffic on the network that has sometimes resulted in high charges, a scalability problem that has also arisen in the past.
With the switch from Ethereum 2.0 to a proof-of-stake mining algorithm, progress in scaling should soon be in sight. The co-founder of Ethereum, Vitalik Buterin previously said that he believes the network can be scaled to 100,000 transactions per second.
However, the network update had months of delays before reaching Phase 0 earlier this week. The founder of MyEtherWallet expects the next phases of Eth2 to take years to fully develop. Mashinsky didn’t provide a specific time estimate, but did give his vote of confidence for the entire network to be updated.
“I firmly believe in ETH 2.0, even if it will take longer than expected to scale and fix all errors”, said.
At the time of publication, Ethereum was priced at around $ 590. Ether (ETH) also affects the equation. Phase 0 required that Stakeholders block at least 32 ETH each, whereby a total of 524,288 ETH are required for the start of the beacon chain. Since ETH has to stay locked until phase 2 occurs, which could happen in a few years, one might wonder how the price of ETH could affect the progress of Eth2.
As a result, Mashinsky sees higher prices for ETH. He postulated:
“As the ETH is more and more tied to the ETH 2.0 or is used on various DeFi and CeFi platforms, the scarcity effect in connection with the need to join these platforms increases the price. Almost all DEX exchanges are denominated in ETH, which is a huge advantage for Ethereum. “
The completion of Phase 0 of Eth2 also occurred in a rapid bull market for cryptocurrencies. Bitcoin (BTC) recently passed its all-time high.