The Ethereum community will celebrate an important milestone on Monday, May 4th, 2020 when the 10 millionth block of the blockchain was mined. The event is a bittersweet moment for Ethereum, which will transition to the Proof-of-Stake (PoS) mechanism in July (pending further delays) with the switch to the Proof-of-Work (PoW) mechanism used by Bitcoin. However, there are still doubts about the introduction of “Phase 0” and a possible increase in the inflation rate if the blockchain switches to PoS.
Ethereum at #Block 10,000,000
The block number 10,000,000 was mined on May 4th, 2020 at 1:22:13 p.m. + UTC on Ethereum. The number of blocks mined in the second largest blockchain was set over 15 times higher than for Bitcoin, although they were 5 years younger. However, Ethereum’s block times degrade much faster than BTC’s blocks, i.e. an average of 20 seconds compared to Bitcoin’s 10-minute blocks.
The original time set for ETH in their whitepaper is 12.4 seconds. However, due to the intermittent congestion of the network and the adjustment of the difficulties, the time was reduced. During the 2017 bull run, when ETH topped the $ 1,400 mark, the average block times rose to an average of 50 seconds.
With the network moving to PoS consensus mechanisms, such problems will be a thing of the past. However, the complexity of the implementation of ETH 2.0 currently remains a central challenge for the developers.
Can the ETH 2.0 phase 0 start in July?
The long awaited test phase of ETH 2.0 in July may not be as significant as the community expects for next July. According to a BitMEX Exchange release, Ethereum 2.0 may be a very complicated task and may even take longer than expected. The new system focuses on solving the problem of scalability in the blockchain using sharding, which breaks the network down into smaller pieces to enable faster processing of transactions.
The two main problems that ETH developers face when implementing sharding protocols are: the existing smart contracts cannot simply transition into a sharded network, and the set increase in the ETH inflation rate when transitioning from ETH 1 to ETH 2.0 takes place.
· The core problem of the sharding network
In order to integrate the current smart contracts into sharded networks, the developers need to create a compatible blockchain from scratch. Once built, every intelligent contract in the ETH 1 chain will be converted to ETH 2.0 over the next few years.
To counteract this, the ETH development team will facilitate the transition from ETH 1 to ETH 2.0 by using both versions at the same time and merging the two in the future.
· An increase in the inflation rate?
Since both the ETH 1 PoW network and the PoS ETH 2.0 model are running, multiple validators across the chain, including miners and stakers, need to be fed from the same pot. This will increase ETH’s emission rate over the years, which will lead to an increased supply of eth and possible price effects.
“Therefore, Ethereum’s inflation rate will rise, at least temporarily, until the two systems are finally merged. This can be seen as a downside, but it can be worth paying a price to ensure a successful transition to Eth2. “
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About the author
In the field since 2015 and he still loves everything blockchain and crypto! FC Barcelona fan. Author and journalist. Follow him at @lujanodera.