The CEO of Celsius recognises that this is a very complicated issue, but he says it is crucial for the future of ETH
Ethereum 2.0 recently launched its Beacon Chain and completed the highly anticipated Phase 0, which has been announced for years. Although he has expressed confidence in Eth2, Celsius CEO and founder Alex Mashinsky believes the network could lose its leading role if it fails to scale quickly and significantly.
When we asked Mashinsky what he felt was the next hurdle that Eth2 would face, he responded:
„Ethereum must demonstrate that it can scale its transactions at least 100 times without compromising security or decentralisation. If he fails to do this, Cardano and Polkadot will take over“.
On Thursday, the Ethereum network processed around 13 transactions per second, according to Blockchair data: an increase of 100 times over now would be equivalent to around 1,300 transactions per second.
Ethereum has so far been the main blockchain for the development of decentralised applications: in addition, this year’s boom in decentralised finance took place mainly on Ethereum. This surge in activity has led to high traffic on the network, which has caused the cost of commissions to soar: a scalability problem that had also occurred on previous occasions.
With the transition of Ethereum 2.0 to a Proof-of-Stake Bitcoin Method consensus algorithm, we should see progress in terms of scalability. The co-founder of the protocol, Vitalik Buterin, stated earlier that in his opinion the network could process as many as 100,000 transactions per second.
However, the network update faced months of delays before reaching Phase 0 earlier this week. The founder of MyEtherWallet said that the next phases of Eth2 will take years to complete. Mashinsky did not give an accurate estimate of the time needed, but expressed his confidence in updating the network as a whole:
„I’m a big fan of ETH 2.0, although it will take longer than expected to scale and fix all the bugs.
Ethereum’s native token, Ether (ETH), is exchanged for around $590 at the time of publication of this article. Phase 0 required interested parties to deposit at least 32 ETHs each, for a total of 524,288 ETHs, in a smart contract for the launch of the Beacon Chain. As these ETHs have to remain locked in until Phase 2 is launched, which could be implemented in several years‘ time, doubts naturally arise as to how this will affect the price of ETHs.
For his part, Mashinsky believes that the value of Ether will grow:
„As more and more Ether are deposited on ETH 2.0 or used on different DeFi and CeFi platforms, scarcity combined with the need to join these platforms will push its price higher. Almost all decentralised exchanges work in ETH: this is a huge advantage for Ethereum“.
The completion of Phase 0 of Eth2 took place in the context of a fast growing crypto market: recently Bitcoin (BTC) reached and exceeded its all-time high.
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