Just hours before the launch of Ethereum 2.0, Coinbase, America’s leading cryptocurrency exchange, decided to warmly welcome the development of the world’s largest blockchain after Bitcoin.
Now traders and hodlers waiting for the ETH2 upgrade had confirmation from Coinbase that the exchange would enable an ETH2 currency stakeout service. Since Coinbase is a non-controversial upgrade, it of course also guarantees trading in these new tokens.
Participation and trading of ETH2 on Coinbase
The Coinbase team also confirmed the future interoperability between the tokens ETH and ETH2, allowing users to trade both at will. It is important to point out, however, that in the event that they have decided to put their coins in the Ethereum 2.0 smart contract, the funds will be frozen for an undefined period of time.
While staked ETH2 tokens remain blocked in the beacon chain, Coinbase will also enable trading between ETH2, ETH and all other supported currencies that provide liquidity to our customers.
Coinbase has nothing to do with this “lockout”. Instead, developers set this standard in the base code of Ethereum 2.0. The network leaves the tokens blocked for some time. However, the community seems to be satisfied with this condition and has even reached and exceeded the minimum goal of starting the implementation of the PoS algorithm with over 855,000 set ETH.
Coinbase said they would share more details “closer to the start of each feature”. For now, they just announced that these features will be available “early 2021” and that they will only be available in certain jurisdictions.
What is Ethereum 2.0?
Ethereum 2.0 is a further development of the original Ethereum blockchain. Blockchain had to continue working as intended and foreseen.
It’s important to remember that, unlike Bitcoin and other blockchains, the Ethereum blockchain has a lot of interactions when tokens trade hands, contracts are developed, and decentralized applications are run on that network.
Ethereum’s success turned out to be its main weakness. The network was dangerously nearing its limits and on the verge of collapse. Under the current conditions, Ethereum was not ready for global rollout.
Ethereum 2.0 tries to change this. First, by switching from PoW to PoS, the consensus algorithm becomes much more efficient without unnecessary energy costs. Similarly, a 51% attack becomes more complicated as the risk to the malicious attacker would be higher.
Proof of work against proof of deployment. Image: LeewayHertz
Now those who wager their coins – in Coinbase or any other wallet – receive rewards for validating transactions in the same way that a miner receives Bitcoin for doing it.
Ethereum 2.0, on the other hand, is compatible with multiple Layer 2 solutions that allow you to process thousands of transactions per second, potentially putting Ethereum above Visa, Mastercard, and any modern day payment processor.
No wonder, then, that stake compatibility is a key feature of the Ethereum ecosystem, and Coinbase was eager to step in.
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