Ethereum 2.0 is Live with Ample Proof of Stake (and a lot to prove)

Image source: VVictor of Pixabay

Eth 2.0 Beacon Chain Launches with all due enthusiasm from those who eagerly anticipate the next phase of mainstream blockchain adoption. 

On December 1, Ethereum fulfilled its promise and Launched Ethereum 2.0’s Beacon Chain while all DeFi-related projects held their breath in anticipation. Early signs show that the enthusiasm from the staking community is definitely there — but what impact will it have on driving mainstream adoption of blockchain through enterprise-level applications?

Last week was had the crypto community in a frenzy of enthusiasm with all bulls on Bitcoin hitting a new all-time high of $19,911 and altcoin HODLRs celebrating this important step for Eth 2.0.

Ethereum 2.0’s Beacon Chain is a Proof-of-Stake (PoS) blockchain, and the first step in the plan to change Ethereum’s consensus mechanism from Proof-of-Work (PoW) to Proof-of-Stake. It runs parallel to the original Ethereum PoW chain, making sure that there is no break in continuity of service.

Ethereum 2.0’s Phase 0 activation shows that a significant threshold of ETH holders are confident to stake 32 ETH each, worth approximately $332 million combined. These funds are held until Phase 2 is completed, between 2021 and 2022.

The promises of Eth 2.0 will allow the network to overcome the dilemma of security vs. decentralization or scalability, which has limited Ethereum since its launch in 2015. The network’s proof-of-work consensus mechanism made it vulnerable to possible 51% attacks. A recent 51% attack on the Ethereum Classic protocol resulted in $5.6 million worth of ETC being double-spent.

Dec 9 Snapshot from Eth2 Rewards Bot

On the first day of launch Eth 2.0 raised 66% more funds than the minimum required to secure network operations. In the network’s second week live, the total amount of staked ETH rose from 66% to 141% above the original threshold of 524,288 ETH. 

Crypto investor and influencer Tyler Winklevoss believes in the potential of the long-anticipated Eth 2.0 — and certainly in its impact on ETH prices.

Tyler Winklevoss of Gemini Exchange.

Gaurang Torvekar, Co-Founder and CEO of Indorse, a Decentralized Professional Network, expressed an enthusiasm that seems to be reflective of most of the crypto-world’s eager anticipation. He said, “ETH2 is really going to be a game-changer. It will take blockchain and crypto as a whole in the same category as Paypal and Visa. DeFi apps will certainly benefit, and it would catapult them towards mainstream adoption.”

Anish Mohammed, Co-Founder RSQ Labs remarked on the potential of the next phase of Ethereum in an upcoming book of blockchain interviews by Jillian Godsil, “Persons of Interest”. Mohammed stated in the book, “Ethereum (1.0)is a bit like Uber drivers in Bangalore; when the traffic gets heavy, they put up their prices. Unless you pay higher fees, your trade won’t go through… but when the throughput is good enough then it’s a game-changer; no traffic jams, no surge prices in uber and people allowed access to finance without needing a bank account.”

Interest in DeFi and smart contract-driven use cases has been accelerated by the pandemic and global financial hardships associated with it. Fintech loan company Plenti recently announced they have become the first Australian-based lenders to originate over $1 billion in loans.

Conclusions

The will is there to make Eth 2.0 live up to expectations, and the support from the community has been unified and impressive. 

If Eth 2.0 can live up to its promises, it will be integral to driving mainstream adoption primarily through enterprise apps and a wider range of real-world use cases. If BTC continues on its stratospheric trajectory (as many say it will) and Eth 2.0 lives up to its promises, the celebratory feeling of Q4 2020 will just be the pre-party for the expansion and adoption of 2021.