Celsius CEO warns Ethereum to scale up quickly, ETH may well be running out of space soon
Despite a long lead time, Alex Mashinsky remains optimistic about the future migration to ETH 2.0.
Ethereum 2.0 has recently launched its Beacon Chain, completing phase 0 of the scaling efforts of the Ethereum project. While Alex Mashinsky, CEO and founder of the crypto company Celsius, is confident that Eth2 will be successful, he warns that there must be rapid and significant progress in scalability if the smart contract platform is not to lose its market dominance.
„Ethereum must now prove that it can scale its transactions 100 times without losing security and decentralisation,“ Mashinsky told Cointelegraph. He continues: „If it doesn’t succeed, Cardano and Polkadot will strike.“
According to Blockchair’s data, the Ethereum network can handle 13 transactions per second at the time of going to press. A hundredfold Crypto Wealth increase would therefore mean a speed of 1,300 transactions per second.
DApps and DeFi have dramatically increased
Ethereum is currently the first port of call for developers building decentralised apps (DApps), as the Blockchain network offers the best conditions for their operation. Also the Decentralised Financial Services (DeFi), around which a real hype arose in 2020, are mainly based on Ethereum. DApps and DeFi have dramatically increased the use of the block chain network, which is why transaction fees have recently climbed to dizzying heights. However, it is not the increasing user base that is the evil, as this is actually desired, but the lack of scalability of Ethereum.
With the upgrade to Ethereum 2.0, the Blockchain network therefore intends to switch to the proof-of-stake consensus method, which enables much better scaling. Co-founder Vitalik Buterin is convinced that this could enable up to 100,000 transactions per second to be processed in the future.
However, the long-awaited upgrade has been repeatedly postponed, and this week has just successfully completed phase 0. The founder of the wallet service MyEtherWallet suspects that the further phases could also take several years. Celsius boss Mashinsky does not want to make any predictions as to how long it will take until the full roll-out, but despite any lengthy delays he is still optimistic about the upgrade.
„I am absolutely convinced of ETH 2.0, even if it takes longer than expected to scale and eliminate all errors,“ says Mashinsky.
The Ethereum crypto currency Ether (ETH), which currently stands at just under USD 590, could be massively affected by the upcoming upgrade even before the changeover. In the course of Phase 0, all participating users had to freeze 32 ETHs each in order to provide the 524,288 ETHs needed to start the Beacon Chain. Since the ETH funds in question must remain frozen until the start of Phase 2, which may not be for several years, an additional shortage of crypto-currency is taking place. This will probably cause the exchange rate to rise, as Mashinsky also assumes:
„The more ETH are frozen for ETH 2.0 or stored in DeFi projects, the more there will be a shortage, which in combination with a growing user base will ensure a higher exchange rate. In addition, almost all decentralised crypto exchanges (DEX) are denominated in ETH, which is a great advantage for Ethereum“.
The completion of phase 0 of Eth2 comes at a time when the entire crypto market is in full swing. The market leader Bitcoin (BTC) has recently even been able to climb to a new record high, which has also given all other crypto currencies a slipstream for their own gains.