Crypto Market Dominance; Ethereum Still in the Race?

A couple of years back, it was almost impossible to suggest alternative networks in place of Ethereum simply because of its role as the pioneer hub for non-fungible tokens (NFTs), decentralized finance (DeFi), and smart contracts. As the years go by and the network’s inability to efficiently process transactions and its high cost of gas continue to make headlines, there’s been a ton of verbal attacks on this network accompanied by the launch of various alternatives like Tezos and WRAP Protocol.

While most have described these attacks as targeted and probably sponsored, it is impossible to ignore the deficiencies of Ethereum presently.

Crypto Market Dominance

In the fight for crypto dominance, Bitcoin as the premier cryptocurrency and the most valuable is at the top of the list but the network’s inability to meet the growing needs of users could ruin its chances of being at the top for a long while. While Ethereum has been tipped as the next big thing and probably the platform to take the crypto market to the next level, it is problem-ridden as well.

Unlike Bitcoin community members, Ethereum developers care and are always ready to make the needed switch to ensure a more scalable and efficient platform. In line with that, Ethereum developers led by founder Vitalik Buterin have proposed a new upgrade tagged “Ethereum 2.0”. This update could see the network switch from simply being a hub to a purely decentralized crypto network where users can seamlessly initiate transfers and see them processed in seconds.

Well, that’s not all. The Ethereum 2.0 upgrade will usher in a ton of changes that will not only increase the network’s global adoption but will push it towards crypto market dominance.

Ethereum 2.0 Changes

Leaving the Proof-of-work Consensus Mechanism

Arguably, one of the foremost reasons for Ethereum and Bitcoin’s inability to scale is the proof-of-work algorithm. The PoW as it is fondly called is a power-consuming inherently inefficient mechanism.

On the proof-of-work, competing nodes will have to solve intricate cryptographic problems in an attempt to add new blocks to the chain. For security purposes, complexity levels of the hashes are kept at an all-time high, serving as a deterrent to individuals with malicious intent. The complicated nature means that it would require advanced and expensive hardware to attack the network, making it almost impossible.

The sticking point is that the proof-of-work mechanism is inefficient, and it has always been. As part of its upgrade plans, Ethereum will make a requisite switch from this consensus mechanism to the proof-of-stake.

On the PoS system, nodes or validators are chosen by the mechanism based on the number of tokens staked. The chances of a node validating more transactions will depend solely on the number of tokens locked. This eliminates the complexity and with each node staking assets, it becomes expensive to launch a malicious attack on the network.

Integrating Sharding

This is one of the best parts of the proposed Ethereum 2.0 upgrade but before that, let’s briefly talk about how the Ethereum blockchain functions presently.

Currently, all of the data or new blocks added to the blockchain would need to be verified by all of the participating nodes. This slows down the transaction processing speed. The introduction of sharding, however, will break the data processing task amongst a set of nodes and each will only have to verify just the block it receives. This would increase the network’s overall capacity, therefore setting it on a path of global adoption and market dominance.

The integration of this new transaction verification technique and switch to the PoS mechanism will make Ethereum more efficient and remarkably scalable.

Ethereum WebAssembly (eWASM) to replace Ethereum Virtual Machine (EVM)

One core feature that makes Ethereum a viable network and a worthy Bitcoin challenger is EVM. The Ethereum Virtual Machine is a platform that runs on all of the network’s nodes and is capable of facilitating smart contracts. It is smart contracts and the ability to develop and launch decentralized applications that make Ethereum more than just a financial network.

Albeit popular, the EVM, even for people with advanced programming skills, is an enigma. The switch to the Ethereum WebAssembly will simplify the process of creating app codes on the network. Foremost, eWASM will enable the development of applications and codes on any web browser, something that was impossible on the EVM.

Additionally, this new platform will afford developers the rare privilege of choosing from a wide range of programming languages to work with. As a benefit, the Ethereum WebAssembly will increase the number of developers and programmers on the network.

The Ethereum 2.0 upgrade according to the developers is expected to complete its full phase by 2022. While the Beacon Chain is live, the integration of sharding according to the website is estimated to happen this year.

Conclusion

With Ethereum presently having a few problems that are capable of impeding imminent growth, the proposed update will push the network back into the crypto market dominance race. While Bitcoin is yet to propose a launch of this kind as a solution to its numerous problems, Ethereum could well be on the path to market domination, unopposed.

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