Celsius’ CEO thinks Ethereum could lose its market dominance if this doesn't happen

Published at: Dec. 4, 2020

Ethereum 2.0 recently fired up its Beacon Chain, concluding Phase 0 of a scaling effort years in the making. Although he expressed faith in Eth2, Celsius CEO and founder Alex Mashinsky believes that the network could lose its spotlight if it doesn’t scale quickly and significantly.

“Ethereum needs to prove it can scale its transactions 100x without compromising on security or decentralization,” Mashinsky told Cointelegraph when asked about Eth2’s next hurdle after its Beacon Chain launch. “If it fails to scale, Cardano and Polkadot will take over.”

As of Thursday, Ethereum’s network hosts about 13 transactions per second, according to data from Blockchair. A 100-times increase from now would total roughly 1,300 TPS.

Ethereum has served as the top network for building decentralized applications over the past several years. In 2020, the decentralized finance, or DeFi, boom has largely taken place on Ethereum, as well. This surge in activity has led to high network traffic that has at times resulted in soaring fees — a scaling problem seen on previous occasions as well.

With Ethereum 2.0's shift to a proof-of-stake mining algorithm, scaling advancements should soon be on the horizon. Ethereum co-founder Vitalik Buterin previously said that he believes the network can scale to 100,000 transactions per second.

The network’s upgrade, however, faced months of delays before achieving Phase 0 earlier this week. MyEtherWallet’s founder said he expects Eth2’s next phases will take years to fully play out. Mashinsky did not give a specific time estimate, but he did give his vote of confidence in the network upgrade as a whole.

“I am a big believer in ETH 2.0, even if it will take longer than expected to scale and solve all the bugs,” he said.

At approximately $590 apiece at the time of publication, Ethereum’s native token, Ether (ETH), also plays into the equation. Phase 0 required interested parties to lock up at least 32 ETH each, with a total of 524,288 ETH needed for the Beacon Chain launch. Because the ETH must remain locked until Phase 2 hits, which could be years from now, one might wonder how ETH’s price might factor into Eth2’s advancement.

Mashinsky sees higher prices for ETH as a result. He posited:

“As more and more ETH is locked up for ETH 2.0 or used on different DeFi and CeFi platforms the scarcity effect combined with the need to join these platforms pushes its price higher. Almost all DEX exchanges are denominated in ETH, which is a huge advantage for Ethereum.”

Eth2’s completion of Phase 0 also came amid a rising crypto bull market, which recently saw Bitcoin (BTC) break its previous all-time high.

Tags
Ethereum
Scalability
Vitalik Buterin
Related Posts
Solution to scale Ethereum '100X’ is imminent and will get us through until Eth2: Vitalik
Ethereum co-founder, Vitalik Buterin, believes the network is on the verge of scaling by a factor of 100, predicting the Optimism will release its layer-two solution in the coming weeks. Speaking on the Tim Ferriss podcast, Buterin noted Eth2’s developer are focused on working toward the chain merge with Ethereum, and are confident that layer-two solutions can support the network until sharding is developed. “Rollups are coming very soon,” he said, adding: “we’re fully confident that by the time that we need any more scaling of that, sharding will have already been ready for a long time by then.” Rollups …
Technology / March 10, 2021
Ethereum Second-Layer Scalability Still Needs Work, Says Starkware CEO
Uri Kolodny, co-founder and CEO of blockchain firm StarkWare, told Cointelegraph that Ethereum second-layer scalability solutions still need some work. Ethereum co-founder Vitalik Buterin claimed on June 1 that the blockchain’s layer-two scaling initial deployment has “basically” succeeded. Kolodny — on the other hand — told Cointelegraph that he is not as convinced: “I wouldn't pop the champagne bottles just yet, as many of these proposed solutions have at this point been deployed only on Twitter, not on Ethereum Mainnet.” Kolodny admitted that there are many promising developments when it comes to second-layer Ethereum scalability solutions. He explained that “there …
Technology / June 2, 2020
ETH 2.0 benefits will come faster than people expect, Vitalik says in AMA
Ethereum co-founder Vitalik Buterin recently answered a number of community questions as part of an "ask me anything," or AMA, session on Reddit. During the AMA, hosted by the Ethereum Foundation’s ETH 2.0 research team, Buterin said that he expects noticeable network improvements sooner rather than later. “TLDR: merge happens faster, PoS happens faster, you get your juicy 100k TPS faster,” Buterin said on Wednesday as part of the foundation’s fifth AMA on ETH 2.0. Ethereum’s network has suffered periods of high congestion at various points over the years, depending on various applications and related traffic. CryptoKitties slowed the Ethereum …
Ethereum / Nov. 18, 2020
Vitalik Buterin Talks Scalability: ‘Ethereum Blockchain Is Almost Full’
Ethereum co-founder Vitalik Buterin says the Ethereum blockchain is almost full. In an interview with The Star published Aug. 19, he said the hurdle that faces big organizations interested in the Ethereum ecosystem is the still-thorny matter of the blockchain’s scalability. “Scalability is a big bottleneck” Buterin’s stark comments were made as part of a discussion of what he perceives to be the biggest roadblocks to the widespread adoption of cryptocurrencies. He conceded that: “Scalability is a big bottleneck because the Ethereum blockchain is almost full. If you’re a bigger organization, the calculus is that if we join, it will …
Blockchain / Aug. 19, 2019
How MIT Joined Ethereum in the Race for the PoS Blockchain
As reported by Cointelegraph on Jan. 24, the press service of the Massachusetts Technical Institute (MIT) announced the development of a new cryptocurrency design based on the proof-of-stake (PoS) protocol. Ethereum — Algorand’s closest competitor, according to the existing estimates — will launch its PoS system sometime between 2019 and 2021. Scheduled updates required for a gradual transition from the proof-of-work (PoW) to a PoS algorithm have been regularly postponed by the Ethereum Foundation due to network vulnerabilities and failures in the process of the network’s upgrade. Trilemma: It's all about scalability The term “trilemma” was first used by Vitalik …
Blockchain / Feb. 7, 2019