Author: Captain Hiro
For Ethereum, the transition from a proof of work (PoW) mechanism to a proof of stake (PoS) has always been a highly anticipated event. Although the launch time of Ethereum 2.0 has been delayed, and there is no clear deadline for release, the recent price trend of ETH is very difficult and good, and the number of users pouring into the Ethereum ecosystem has remained stable.
Vitalik Buterin, the co-founder of Ethereum, explained in a recent episode of the Unchained podcast what Ethereum 2.0 will look like once it is launched, and also explained how the transition of the proof-of-stake mechanism will affect the overall security of the network. Although there are a lot of discussions and publicity about Ethereum 2.0 and staking functions, more and more people are worried about whether it will make the process and protocol of Ethereum more complicated. Buterin said:
For example, one of the disadvantages of proof of stake is that it is a bit technically complicated because you have to deal with validating nodes. You must figure out what the process of logging in and logging out of the verification node is like, there are many similar management things that happen in the protocol.
Image source: Skew
As the price of ETH has performed well in the past month, its price volatility has steadily increased. According to data from Skew, the price volatility of ETH has climbed to 57% in the past few days. However, what impact the introduction of staking has on the price and monetary policy of ETH may only be answered after the launch of Ethereum 2.0. But he went on to say:
It is difficult to think of specific actions that will reduce the volatility of ETH prices. When you compare Ethereum with many other currencies, it is inevitable that its price volatility is so high. From a statistical point of view, the price volatility of Ethereum is higher than that of Bitcoin, but it is still higher than many other currencies. The lower cryptocurrency is lower.
Although the price increase advantage of ETH has been very obvious in the past few days, the ecosystem still faces great risks. With the dramatic changes in the Ethereum protocol, Ethereum may become a victim of the second-system syndrome, and eventually lead to the complexity of Ethereum 2.0. In this regard, the co-founder of Ethereum stated:
Network security is an important reason why we have been working hard to make the protocol simpler. I can definitely think that the agreement now is as simple as it was a year and a half ago. This is a very important thing.