“Ethereum 2.0” is just a fake climax

ETH2.0 is a false climax. Its demands and solutions have basic logical errors. It will not only fail completely, but will also have a worse impact on the entire crypto community.

Author | Gu Shi Source | Liandede

Ethereum 2.0 is a false climax. Its requirements and solutions have basic logical errors. It will not only fail completely, but will also have a worse impact on the entire crypto community.

— 1—

Data expansion is a false demand

The obsession with "capacity expansion" brought Ethereum in 2014, BCH in 2017, EOS in 2018, Polkadot and Cosmos in 2019, DeFi in 2020, and "Ethereum 2.0" in 2021 to the crypto world.

"Ethereum 2.0" is a typical "data expansion" whose assumption is "data congestion", but this is not congestion in the true sense, but vehicles that pay high tolls are given priority.

In fact, as value networks, Bitcoin and Ethereum have never been truly congested, and the scale of value they process has instead been increasing.

The representatives of value expansion are "Ethereum 1.0" and "DeFi", which achieved the goal of value expansion by allowing the issuance of more assets and processing more transaction types. They also led the crypto community out of the trough twice in 2017 and 2020 respectively.

“Ethereum 2.0” designed for a false “data congestion assumption” is just a castle in the air.

—2 —

Decentralization is the only advantage

The "Impossible Trinity" turns "decentralization" from a must to an optional option. This erroneous statement has misled many teams.

The purpose of decentralization is not to fight against regulation, but to fight against human nature. We need a 24/7 unattended trust machine that is not affected by the will of any group.

All technical indicators of POS consensus look good, but it is currently unable to achieve true decentralization. Its block production tool is tokens, and with the Pareto effect, the 80/20 rule will definitely appear for tokens. The 80/20 rule for asset distribution is not scary, but the 80/20 rule for production tools is what is really scary.

At the same time, the identities of the operators of the entire network are exposed in the centralized world, and the probability of survival is zero when encountering a large-scale attack.

POW miners are profit-driven and do not care about the life or death of the system or the price of the currency. They come when there is money to be made and leave when there is no money. These are the true loyal maintainers of the system and they only follow one rule.

Token holders are different. They have various judgment indicators and standards and cannot have a unified will.

The exploration of POS should be left to other innovative communities, rather than taking risks with an ecosystem that carries nearly 100 billion US dollars in value.

—3 —

Core technical issues encounter bottlenecks

The core technical challenge of Ethereum 2.0 is sharding technology, and the Ethereum Foundation’s recently updated roadmap has made it very clear:

(1) The importance of Phase 2 is no longer emphasized for the time being. Phase 1 is dedicated to sharding data for rollup.

(2) The beacon chain will have execution capabilities, that is, after the Eth1-Eth2 merger, the beacon chain blocks will directly include transactions;

(3) The three major tasks after Phase 0 is implemented: light client support, data sharding, and merging. They will be carried out in parallel, and any module will be launched as soon as it is ready.

I guess most people can't fully understand these three sentences, so I'll simply translate them for you:

(1) We were unable to produce a usable version of Ethereum 2.0 because we were unable to produce “quadratic sharding”. We thought it would be better to first understand the simplest part of sharding technology and provide it to the community’s Layer 2 solution.

(2) The currently available Ethereum 2.0 version cannot be expanded

(3) The "Ethereum 2.0" you saw on December 1, 2020 is a version that can do nothing but "staking". We are advancing every piece of work, and you can use it when we can produce it.

In other words: The reason why it will take another three years for Ethereum 2.0 to be truly usable is because of sharding, a “controlled nuclear fusion technology”.

"Quadratic sharding" is Ethereum's description of its own sharding technology, and such a technical solution can be designed logically.

However, very difficult problems were encountered during the actual engineering process, resulting in the inability to achieve true sharding. Therefore, even though the 2.0 mainnet is now online, its performance is no different from 1.0.

—4 —

Layer2 has achieved remarkable results

From Zk rollup to Optimistc rollup, we have seen a large number of mature second-layer network solutions today. Well-known DeFi projects such as Synthetix and Uniswap have begun to deploy on the second-layer network. It is foreseeable that Layer2 can at least expand Ethereum by 10 times.

The only criticism is the composability between different rollups, and there are already development teams working on solving these problems.

In other words, both Ethereum 2.0 and Layer2 are currently facing difficulties with composability. Fortunately, the composability problem between Layer2 is relatively easy to solve. It is just a matter of development time and will not require long-term technical breakthroughs like Ethereum 2.0.

How to solve the development of layer2 composability?

—5 —

Ethereum is a financial system, not software

People of insight in the Ethereum community and the entire crypto community have raised questions about 2.0, but the market's high sentiment quickly drowned out these voices.

As the power to speak on the underlying protocol begins to concentrate, almost no one questions the views and practices of the Ethereum Foundation.

When we look at the value network with software thinking, we focus on a series of unrealistic technical indicators. When we look at the value network with economic system thinking, we look at the problem differently.

The upgrade of the underlying protocol means the transformation of various definitions and concepts, and the role of developers alone cannot really solve the problem.

To reiterate the point of this article:

ETH2.0 is a false climax. Its demands and solutions have basic logical errors. It will not only fail completely, but will also have a worse impact on the entire crypto community.