As a seasoned crypto investor with over a decade of experience in the digital asset market, I have witnessed the growth and evolution of Ethereum from its inception to its current status as the second-largest cryptocurrency by market capitalization. Vitalik Buterin’s recent article on the future of Ethereum, focusing on “The Merge,” has piqued my interest and reaffirmed my faith in this promising project.
Vitalik Buterin, a prominent co-founder of Ethereum, has recently shared his thoughts on the future direction of the protocol, primarily focusing on “The Merge”. You might recall that Ethereum switched from a Proof-of-Work (PoW) system to a Proof-of-Stake (PoS) system about two years ago during this transition called “The Merge”. Buterin’s new perspective is intended to enhance Ethereum’s stability, speed, and ability to mitigate potential centralization issues.
The Core Goals to Revamp Ethereum
In Buterin’s article, the author conceded that the Proof of Stake (PoS) system made some enhancements to the Ethereum network; however, it still requires refinement. His suggested enhancements for the consensus mechanism primarily targeted two objectives:
The team designed the system so it typically finishes processing a block within 2-3 epochs, or about 15 minutes, for rapid finalization. Additionally, an initial amount of 32 ETH is required to start staking. These operational terms were established from the beginning with the goal of increasing the number of validators, reducing the time it takes for a block to be final, and minimizing the resources needed to run a node.
Significantly increasing the number of active validators tends to decrease the amount of ETH needed to stake, but over time these objectives can clash. For example, in order for an economic finalization to occur, every single validator must confirm two messages. This means that with a larger number of validators, it takes longer to process signatures because they need more time to complete the required confirmation steps.
Typically, Ethereum follows a committee-based method in which all validators take part to achieve financial confirmation. However, Buterin mentioned that this system isn’t effective as it could potentially result in a 51% attack. In such an instance, the attacker with control over 51% of the network can undo a confirmed transaction or postpone confirmation.
Proposal to Achieve These Goals
Vitalik Buterin presented three potential solutions to these issues, which he referred to as the Brute force method. In this approach, he suggests enhancing the signature aggregation protocol using Zero-Knowledge Succinct Non-Interactive Argument of Knowledge (ZK-SNARKs), enabling the processing of signatures from a vast number of validators in each time slot. Furthermore, he discussed implementing the Orbit committee system as another solution.
In this setup, a randomly chosen intermediate-sized group takes over the duty of confirming and finalizing the chain, ensuring that the cost to attack remains consistent. As for his final proposal, Buterin discussed the possibility of establishing a two-layered staking system with two types of stakeholders. The first group would require a higher deposit amount, while the second would demand a lower one.
In essence, Buterin intends to align Ethereum’s characteristics with those of performance-centric Layer 1 chains, which are more centralized by nature. The finality mechanism’s enhanced security is attractive for Ethereum, as it could lead to a more secure network. This transition may bring advantages such as a streamlined protocol and infrastructure for users, making transactions easier to handle.
Over the last several days, Ethereum’s price has bounced back and is holding steady. Currently, it’s being traded at around $2,521.25, marking a 2.41% increase over the last day.
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2024-10-14 12:44