ETH 2.0... or something

This is not an in-depth, informative article about the ETH 2.0 roadmap, all of the technical ins and outs or even a deep knowledge base for why they re-branded.

This is also not a 'bash ETH with the typical arguments' article.

My point for writing this post is simply to comment on where we are, what has changed, what still needs to improve, what some people's concerns are about Ethereum, and a final thought: will re-naming things make any difference with public perception?

Where we are

It is my opinion, that we essentially have the same Ether as we have had since before the great migration. By that I mean, the big shift is meant to resolve what Vitalik has, in the past, referred to as an impossible triad problem to solve. If you want better security, you lose some feature sets in quickness and ease of use, perhaps cost. If you want faster, cheaper, you run the risk of being less environmentally forward thinking and sacrifice some security. If you want a balance of all things being improved, you create an incredibly complex future-pointing road-map with tiny milestones along the way that give a strong appearance that progress is being made, and that may be partly true.

In fact, it is my perception that ETH is designed to be at a point of no return. They are deeply ingrained in the sustainability, green is good, PoW is bad, PoS is the answer, and they have for many months now opened staking for the new chain to come. But, meanwhile, a slightly higher security ETH resides on its PoW chain doing its thing. With all of the staking awaiting the new chain, I can't imagine they can turn course backwards, so there will be an ETH 2.0, but it will take a while and it will be called something different.

More important than anything, there are a few small tweaks that have already taken place meant to help patch the temporary real crisis at hand, which is that ETH works fine minus the gas fees. If there is any single thing that opens the door wide to all of the "ETH killers" out there, it is the unacceptable fees. One must consider the cost/value trade-offs and scratch one's head that anyone is actually using ETH in its current condition at all, but it has provided such a wide platform for so many things, and surely proves like Bitcoin, that being early is 90% of the game, because even some competing projects that I cannot stand, are doing massively fast operations and transactions for almost zero fees.

So... where are we, Gordon?

Well, the real answer is we're using a microscopically safer version of ETH on the same 1.0 chain as before, while a lot of people have locked up tens of millions of dollars in the PoS environment.

Instead of huge strides towards the all-important shift over to the new blockchain, they're renaming the process that gets us there. My greatest critique is that the problem isn't in the name; the problem is in the now-disconcerting delays in getting there.

Calling the process of going from old chain ETH to new chain ETH the "execution layer", as opposed to the move from 1.0 to 2.0, is meant to future-proof the branding, to keep the whole "2.0" thing from landing in the trash-pile of corporate 1994-internet sounding themes.

Human 2.0

Web 3.0

You get the picture.

We're now calling PoS the "consensus layer" which I believe is meant to make it stand out, or stand separate as typical Proof of Stake. But, the thing is, it IS paid consensus, and that is the argument many make against the logic behind a decentralized scheme, at minimum for safety sake.

So, it IS resolvable... is Vitalik over-thinking?

Making things too complicated?

Time will tell, or people will simply choose to stick with the safety and comfort of familiarity.

What has changed?

The names of things has changed. We do have a slightly more robust security layer now ready to carry over to the Po... to the consensus layer, and there is certainly a solid 2% improvement in gas fees I'm certain of it, although that $3.70 of left-over ERC20's sitting in my private wallet are destined to never get anywhere because I don't have enough ETH to cover a transfer to do anything with them (even a few months back when they pumped 200%).

What still needs to improve?

Security. Speed. Number of transactions (speed and # of transactions are loosely connected, but not entirely). Gas fees. Testing the theoretical safety of governance under a staked system of this size and importance.

What are some people's concerns about Ethereum?

Gas fees

I don't think anything else involved with Ether matters if the gas fees remain the same. In truth, if everyone adopts excellent, and I mean really excellent L2 solutions, this can be avoided, but there are always trade-offs just like cross-chain risks. The truth is, if you can't operate at full speed full scale on the main chain in most manners that are in-step with a "world computer" master token, then a huge value proposition is left on the table.

ETH cannot provide things like live processing of things that require gas fees to transact for instance, for micro-payments. What about tokens created on ETH designed to provide utility that automatically unlocks payments for services or platform automated processes, but they simply cannot use the model because it costs 20X in fees what someone wants to micro-pay for something?

It would be different if there were two main cryptocurrencies; Bitcoin and ETH, and ETH let you do 'all this stuff' and the fees were just high. There are hundreds of competitors, and someone somewhere is bound to have this figured out already. So again, ETH will have to actually prove itself a leader by showing it has a solution for reducing gas fees in a meaningful way, or the market itself will start to resolve this in the next year or two. 

In all honesty, I don't think ETH even has to resolve it well; there will be competition that can get fees near zero, so we really want ETH to be the project that can 'stake' bragging rights to accomplish what was originally designed. It does a lot of these things well already.

Is it a tool for the deep state?

There are serious concerns that a lot of the buzz word progressive ideologies that arise in the leadership of Ethereum are so well-liked by the WEF, IMF, BiS, World Bank and global governance in general, that ETH may have connections to a global power-grab and many of the freedom-loving cryptonians have heightened spidey-senses that this is taking place. I don't know.

I watch these things like a hawk, and I still maintain that unless Vitalik is an actual agent for the 'state', which is exactly how this would look if he WERE, there is a lot to be said for what he has accomplished in his youth, the fact that he is still comparatively a kid who has done nothing with his young adult life but contemplate turning Bitcoin into the next big evolution in crypto with ETH, so alongside very common interests and priorities in keeping with kids his age, comes sustainability goals via the U.N. along with LGBTQQ justice, the longevity (transhumanism into posthumanism) movement, which shares interest with others like Richard Heart, and some things that have many curious about how this all plays out.

I believe it is a legitimate concern at minimum, that the number of times PoS and ETH have specifically been labeled as solutions in global governmental reports, while Bitcoin's PoW has been pinned as the planet killer, is a sign that there have been some secret handshakes. There is even more evidence of this in early conversations regarding first and second round fundraising as an unregistered security, to which they claim governments have given them a get-out-of-jail free pass of some sort, but none of us know what that means.

All in all, I frankly don't care as long as they are responsible with how ETH operates and they figure out a reasonable way to fix the fees. Seriously, if it cannot transmit value at a reasonable cost nothing else matters. "We resolved cold fusion for the world... but you can't unlock it for less than your mortgage =  who cares" lol.

Will the transition to PoS actually happen and will it work?

I don't think anyone can ignore that concern or dismiss it. If there are no major issues with the transition to PoS, then really and truly why is it taking so long as to require a re-branding? I'm personally not in a rush. The longer it takes, the more curiosity I have about understanding the challenges they face.

No matter what a mess Vitalik often seems to be, the kid is a genius. Hoping for that to be well-used, or if used improperly at least for noble attempts at reasoning. His interesting coded rants and subtle (sometimes completely missed) sense of humor suggest to me what I hope, which is we have a kid with a few hundred billion dollars worth of pressure on his shoulders and a small brilliant coding team, and they are really and truly uncertain whether things will go from testnet to reality without something blowing up. I think a year ago he was finally in a warm and fuzzy place, at least he stated as such. But now, it feels like there are legitimate stalls taking place under the hood, and I believe it is possible there are one of two realities at play. Should I tell you?

Okay later...

Is there a centralization issue?

Well, yeah I think so. I believe that some of the thinking behind staking is massively flawed, but I think there are enough people who want to see the experiment play out, that we should watch and see what happens.

People are concerned that staking opens the door to individuals buying their way towards consensus, governance, control over the network, nation-state attacks, and to be quite frank (or someone named Frederico if that is fitting), I think there is a reason that war-game level game theory and military-grade strategy have not moved in the direction of PoS before.

There may be some critical ideological base-level issues with PoS, but I'm interested to see how it carries over in years to follow. The biggest issue here is to consider the powers-that-be and their keen interest in ETH. Sustainability sure is a clever way to weasel one's way into controlling a global computer network financial system, with governments buying up billions of dollars on that network.

And now as promised, I'll return to those two considerations regarding potential reasons they are stalling 2.0.

1) I think it is possible that Vitalik is listening to people's debates over centralization and hadn't considered some of the real, tangible mathematical probability that PoS really does introduce a serious attack or centralization risk. I have read, in the past, his theories on the topic but that's just it; all of this is an experiment. There is beauty in Bitcoin's simplicity, but it is far under-valued in many people's understanding, as I am a firm believer that the underlying properties of a sound economic design are fundamental to good coding and governance as well. People often mistake energy use as a wasteful byproduct of an outdated design, but those who truly understand the economic principle often sit on certain sidelines of political belief.

In truth, there may be more actual issues in formations of democratization based solely on code locked to stakes, than we have discovered yet. The ETH chain will be the largest experiment in such a thing with more money at 'stake' than anything we can compare it to.

2) I believe even more likely, Vitalik, for good reasons, expected the portions of the roadmap that are already complete, which focused on reducing gas fees, to have made a bigger dent in solving the problem and it has the team second-guessing whether that may be a disaster on PoS. There are important issues to resolve, and I believe they expected some of this to already be reflected in the fees. They have changed some of the roadmap in areas dealing with gas costs since last year, so I believe there may be a genuine slow down taking place. But, what do I know?

Will re-naming things make any difference to public perception?

Well, I've read enough on CryptoTwitter to guess that people are full-on mocking the wording, and I don't think it is having the desired effect. I just don't think they are changing anything about what people see, what they understand, what they will perceive in the historical preservation of the process, and certainly not anything about the success of the changeover.

In a weird way, it really does prove some of the protocol concerns right. Governance is centralized with ETH, and in some ways this is a reality for every decentralized project. It's true. There's a team, a website, a blockchain, a governance, a token issued... these are all things crypto has in common and they are all made by makers. But, centralization starts to stand out as a human feature bug when changes, tweaks, path-reroutes seem to be a feature set of the token itself, and only because that is how the creators are. They make these changes whether anyone wants it or not. It may not matter; PoS may actually perform exactly as they suspect. But, it does push the issue of centralization to the surface in a real and significant way.

I think going from old chain to new, old protocol to new, PoW to PoS, was pretty clear to say "we're going from version 1, to version 2". Isn't that kinda how we do cool world computer stuff? Embrace the nerd! R

e-branding certainly isn't going to make anyone think Vitalik is anything less of a nerd, so why not embrace 2.0 to one's heart's content? And trust me, I mean "nerd" in the most positive sense. I've always believed in the power of the Geek, and Vitalik is no exception despite how much I disagree with many of his worldviews, scientific views, or perhaps his plans for his new chain.

But, as I mention often, my personal preferences to what is true innovation do not make me blind to what actually exists in the field. I am not completely sold on either version of Ether to be honest, but I'm very much interested in it, and I think the crypto world does in fact need for it to continue forward from here without the disastrous avalanche that would occur if NFTs and ERC20s were to suddenly break on-chain. So, let's all watch the show and see how it goes with this new consensus-ish thingy they are rockin'!

And on that weird, slightly altered tone, a Crypto-ey Gordon Freeman, for now... out.