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The long-planned upgrade to the Ethereum network is on the horizon, with phase zero expected to launch this year. To take us through on what we should expect, we bring to you Benjamin Pirus of Cointelegraph with Ethereum Researcher Aditya Asgaonkar, Piers Ridyard of Radix, Muneeb Ali of BlockStack, and Tim Beiko of ConsenSys.
LA Blockchain Summit is hosted and produced by the Los Angeles-based blockchain venture studio, Draper Goren Holm.
Experienced Chief Executive Officer with a demonstrated history of working in the blockchain, crypto and financial services industry. Skilled in Management, Business Development, Finance, Venture Capital, and Private Equity. Strong business development professional with a Bachelor of Laws (LLB), a Bachelor in Chinese and Business, and having achieved the Chartered Financial Analyst (CFA) exam, Level 1.View the profile
Tim Beiko is a product manager at ConsenSys, working on their Ethereum client. Prior to working on blockchain, he held product roles at Element AI and Google and co-founded a travel startup.View the profile
Hey, everyone, and welcome to another La blockchain somewhat event. This one is called etherium 2.0, What to Expect When You're Expecting. My name is BJ, pyrus I'm one of cointelegraph supporters and I'll be your moderator for the show. As many of your probably, where he cerium is expected to see. It's blotching upgraded which will move the blockchain to proof of stake and senses. This significant upgrade has been in the works for quite some time and has seen several delays. It's definitely a big development were talking about today joining us to talk about it. We have Aditya ask him to
her blockchain researcher at the aetherium foundation, money Valley, co-founder and CEO of decentralized application. Company blockstack then Tim Baker in your product manager at blockchain software company consensus welcome. Thanks so much for coming on. So do you can you eat? Give just a real brief as brief as possible. 15, and 20. Second intro on yourself if you want to start Yep, everyone have an Iberico PowerBlock stock. We bring apps and smart contracts to bitcoin. So I guess I'm actually The aetherium
Outsider here on the south. Awesome. Everybody, my name is Tim. I've been working on a consensus protocall group for the past two years. Are there we developed ethereum client spell 431 and a theorem to Excellent energy Tayana on the EF. 50mm foundations of Duty, search team. I work on consensus and proof of stake. I've been working on Gaspard and deceits to network upgrade since 2 years. Excellent. And so I know there's a lot easier for people who are following and maybe some people who have not
like I mentioned. There's there's just so many different developments coming and there's delays. Can you just Briefly summarize the situation and kind of what's going on for people who aren't up to speed. So eat stew is a massive upgrade for the tedium blockchain, it brings two major, and one of them is proof of stake which is a philosophical which brings philosophical differences. In how blockchain is validated. And the second part is massive, scale ability to cheerleading, which is Splitting the network into multiple parts. Excellent. Nice and concise.
So, Tim question for you will ethereum 2.0 replace the current version of the blockchain and will there be a new asset? Well, eat your meat is in existence or Willie 2.0. Just have the same acid as we currently have. That's the tricky one on the way it's oriented as designed is to launch as a separate chain from Italy. Him $2. Oh, and they won and so you'll have the aetherium chain. I thierman realize it exists today, that that keeps on going on. And like, if you just says that there in about 2 hours to change, a lot of things about
aetherium. So it's being rolled out in phases to phase zero Phase 1, Phase 2. And the first one of these faces, which we expect sometime late this year, or early next year is just the proof of stake consensus. So, because this was kind of the most complex part of the system. They wanted to roll that went out first and then basically have the system, just have all the validators, run the purpose of a consensus and do nothing else and so well that happens. We obviously want to keep running applications on the 3rd and so the aetherium without a chain will keep who keep going in parallel. In
terms of the assets if you want to become invalid later on, if they're up to. Oh and earned a reward for doing. So you need to basically burn your Aether, on the e, theory of one chain and then you'll be credited on the ethereum to chain. I'm so It's worth noting I guess they are. This is a one-way mechanism. So what you're saying when you when you do that burn, as you want to be a validator on the ethereum to download Chain all the way until it's fully deployed. So all the way until I can run the applications which is expected to take a
couple years afterwards. So in the meantime, you do have the situation where you have ether, on the ethereum one chain, and you also have this either. That's been deposited on history of two chain, which you know, originally was the same either and but once you deposit it to validate, I'm just here to Knoxville chain. You can't bring it back into the original system that will happen in a couple years afterwards. Gotcha. That makes sense and then a detail just more in the logistics side. What are the transactions per second? Now as I am currently stands and what will the high be
for you to point out? So can you see if you can one possesses about 20 times actions per second with the team to be expected to have 64 shirts and each shirt has those stupid ass eaten one, which is a 64 * Improvement in Trooper. So it goes from about 20 transactions per second and gets us about 1300 transactions per second. Interesting. Yeah, that's it. That's a significant upgrade. So if we wanted to stop in the me to this thing here based on, I mean, each of you have pretty vast experience mini if you want to start the song.
What's so important about athyrium 2.0 in your opinion? Yes, sir. I think maybe a little bit of background might be relevant to her, so I'm my expertise, is mostly. I'm just focusing on distributed systems, get ability, mostly Thanksgiving, cloud computing. And those kind of system, what's going to be limitations on each one, which people have known about, right? It's it's, it's not nothing new. Even if you go back to like, 2016 or 2015, people were aware off the scalability of limitations on Pete one. Like effectively, people remember like cryptokitties like that was a classic example that
calculations on Haywood in application like purple. Please be able to scale. And no that's no. That's where the origins of the new system charge that the idea that he too is going to replace. One and it's going to be much more scalable and that's where the few things come in, right by the idea of purple steak and sharting, which I think is actually more scalability. Improvements are coming war from starting and not, not on my phone but it's not anything over there. And I think one of the things that has happened is for whatever reason. You know,
it's do as as as taking a little bit longer if given the opportunity for a bunch of like these different protocols. So I can do, they put me? She's like, five, other teams out there better. I like saying why lie to is not shipping. Here's a new protocol that has produced a car that has like I'm working on starting or some of their suitability property where you can go. But I think the interesting thing is that each one of these in my view might not have worked for these hands live application, but it did work really well for Financial products like defy that do not require the kind of
scalability that a twitter-like application might might might require. So. I think the big question is that, how do you enable? I like really scared about these on my lap and a need to do is kind of like me. Like the answer they're from YouTube. And that's, that's interesting that you say just that he's one regarding scalability cuz I know there's some skillability problems with defy right now, I'm with high ethereum fees and stuff like that. So it'll be interesting to see how that kind of kind of changes nuts, next question, but Tim's, you want to weigh in on what in your opinion is so
important about 2.0. Yes, I think I'll give her a big plus one to everything when he said. You know, a good overview there. And based on recent comments about defying the recent feed problems, I think the biggest challenge with any blockchain is as the demand for the black space. Like the creases, you know, that buck space becomes more more valuable. And the way you charge for that the most cases if she's, right. And the only way to reduce the cost is to increase the supply of blank space on available on the chain
and the different ways to do that. So I think if they keep the approach of sharting population, which means you basically, split your route 64 that I'll run in parallel and you created like this fixed increase. But even that is probably not enough. Because if we end up in the spots, you know what a couple Aetherium is more than 64 times as popular. I will be back back here and I think this is where a lot of the affair is starting to change to accommodate Slayer to Sushi today or two solutions, basically run. These side
chains are the different types of, you know, that have different set of trust properties, people can use for different types of applications. For example, if you want to run an application like Twitter, you know, and and commit some parts of it to your chain. You maybe don't need the same types of guarantees as if you're sending, you know, millions of dollars on changed. And so you can create some day or two solutions that are more scalable and work a bit better for us and that's something we're starting to see more and more chain
roll ups are now they're the flavor of stealing. That's a lot of projects going to be looking up and they provide a way for projects to just move a lot of their compensation off of Base layer of the bunch but they don't have to pay the high fees. There's on every transaction but only when users with should I join the application or leave it? And I think we'll see more and more of that and the design of a low before we have the sharted blockchain, which runs 64. If there is a change of parallel, I will have what's called like data changed. So instead of doing computation
change to store data and that's a way where Layer Two Solutions can maybe store some of the data that they need a bit cheaper on Chene and also help with if he's there. So I think I guess just summarize act like it's important that we don't just rely on charting. The chain has the only way forward because that's kind of a sixth, you know, increasing throughput. Buy Hobbit Harbor. Many shots. We have if the community in the interest that use, if they're going to grow quicker than that, we haven't made like a meth progress whereas later, too. So you
shouldn't spend Much much more stealing because for just one transaction for user more or less, you can get, you know, an almost infinite number of transactions on on their side chain. Awesome. Aditya, what are you got? Yeah, basically everything. But the two speakers before and he said but also the problem with each one right now is celebrity, of course, and this manifests itself in high Gatsby's, which means that the more mundane applications on the blockchain are rarely used because it has a high cost to
use. So I think that with this Holy Grail of scalability, we would see like lower gas fee is more mundane applications being deployed and this would lead to kind of if you didn't applications proliferating more of our daily lives, Excellent. And so each of you kind of touched on this as well. I'm going to dive into decentralized Finance. Next for listeners who aren't familiar, decentralized? Finance essentially is has ballooned in, in crypto, this saw this year and it essentially is lending
and borrowing on the blockchain and directly interacting with other people and all of the above. So, how do you guys each tank? If your name to Bruno will affect defy in Johnston, Sure. So I think the main concern that defy folks had about if they're $2, was the fact that it would split you split things into shards, a lot of these applications don't necessarily work as well. Because what's what's enabled? A lot of Defy is the fact that you can use that, I deposited another protocol ensure that
deposits with yet another protocol in order to do that quite quickly. You need the smart contracts to be able to talk to each other. So there's a couple of things have changed a lot better. So the communications between shards has been made quicker, but at the same time, there's always going to be kind of talk to you later. If things are different charts to communicate between Federer and I'll never be as good as having you as a Single Shard. Where you can, you can do a lot of things within a single transaction. And I think this is why I
like I mentioned we're seeing a lot more empty. Is being put on having, these are two solutions that could run some defy apps. And also, just reducing the number of Shard. So at least you mentioned at the beginning or 64 of them and the original spec, everything emptied. I do have a 2024, so that's another way in which, you know, I think the spec has moved towards trying to accommodate those projects and and and have it there and be the platform that that makes the most sense for them. Yeah, that makes sense for sure, anybody think
so. It's already starting works really well more specifically like if you can actually contain most of your a logic inside A Single Shard, right? That's where you got the most benefit out of, right? So let's say you're just replicating the same type of competition, you know, hundreds or thousands of times over but the shards are self-contained. I didn't need to talk to each other. I got a really good used gas for you shortly. I think the critics rating of them would say that if you look at the workloads
on the 8th, 110 or any blocks in the workloads, the distribution is that it's smart, contracts are almost like at randomly Walking to research it very hard to predict what the workload is going to be. So you cannot really fit a certain type of what's inside a short. And I think that's the thing that Tim was bringing up that if the smart contracts me to talk to Smart contracts, which are other Richard, what happens, then, like the machine gives them. It would be, like, imagine that there is a Shard. I'll give the example of like everyone wants to talk to you.
Nice. And if to talk to you nice off, every one is communicating to A Single Shard then that Shard becomes a big is batam like 4 or 7 do it in your kind of like going back to having a single single chain, right? So those are type of things that I think still need to be ironed out more and I'm I'm working a bigger fan of there, two types of lucian's or even side chains or change that do you connect to another name of the base chain? And basically I represent like thousands of transactions in a single transaction or single 1/2 on a bass jam. The Broncos are
such that people want to settle on a single chain and be under Under Armour Global and like same state. Yeah, I know that kind of just everything you guys have set so far. Just brings me to the point that, like, we're really early, in this mean, we're really in crypto, but we're also really early and be fine, it's just interesting. Hearing you guys test out, these kind of theories and like experiments with what might work. And it's just an interesting part of being. So early to this party. How do you say, what are you? What do you think how old is doing 2.0 affect EFI? If so, as a
result of the fundamental assumption in defy apps right now is that every contact and talked to every other contract and that is untrue, is not read the whole thing eats to basically brand-new, partition the contracts into a separate charge, they'll not be able to talk to each other, that easily. And this can lead to kind of the fundamental theorem of how defy applications work. Maybe we'll see some Excel contain defy applications that don't really need to talk to other smart contracts much. So it would mean the space and You know, it hasn't
evolved to a point where it met you yet because a lot of scope for like delivering a different class of applications. Excellent and I'll start this next question off with you. I know a lot of Traders are probably interested in this question but How will I know speculatively some people will play the speculation to, by the rivers of the new sightseeing, on whenever a 3 in 2.0 launches, how will a fusion 2.0, affect the value of the coins. And I mean, last year, a couple years ago, I remember seeing an argument that there was an essentially, like,
if I could function with its crying at $0, like is there a need for it to be like worth anything in price? I don't know. That's that's a question I've had and I figure a lot of people have had the same questions. So what are your thoughts? Back to the first part of that question. I cannot answer it because I definitely don't understand. Crypto markets or even maybe even any markets in gender is not so good at that stuff, but your second question which is candy Network operate at its price being zero. The answer is no. And the fundamental reason there is proof of stake operate on the
premise that if it's badly to do something bad or if they're trying to attack the system of a misbehaving in some way, then they'll be penalized. And these penalties apply to the stake, which is in the, in the coin. It so, eat. Eat place has to be like greater than zero for the penalties to have any kind of effect in terms of incentive. Interesting temp, you have anything to wait on that. All agree with what you just said that, you know, I think it's extremely hard to speculate on the value of if it's a pretty volatile market. So I
won't make any predictions there. You can't have you do a price of 0 and I think you would prefer steak that the security of the network is, is somewhat tied to the price kind of like, we're in that paperwork, that's work. It's like the hash rate, right? And there are mechanisms that can attend, you know, the network hashrate, lower the raises and pepper steak at Senator mechanisms for price. But you know, those definitely break down once you hit 0. Interesting money. Did you have anything different to add more
for because you're paying for smart contracts? Complication interpretation can be free server. That, you know, you and box boring and run for a month. So I can block interpretations are by definition very, very scarce, a tear, in my boost a car Concept in general. And their many blocks is now that use it, it scares me. Because when people talk about like a malicious act ra can get slashed Even a honest note can get / depending on various types of network conditions or errors. I think polka dot recently went through a it was a big
one of their validators been people know there's not a malicious know what I just went offline for whatever reason and got slashed. And I think people don't expect that, right? Like, it's a little bit like stations are there? Like, I'm just putting money in and I have this return and they don't understand the risks over there where, what if you get /? Not because you were being malicious, but you got slashed because of some network error. He was disconnected from the night before a while when you came back online or whatever server your diploid, you know, bugs happening all the time.
If people understand the risk, that I feel feel feel feel better. I'll go get people understand that there. Singapore State as this again. He'd almost like a yield that they're going to get if they just bought a spit. And yeah, I would definitely + 1 all of that. But I think it's it's worth fighting. That's, you know, this is a risky. I I kind of like the fact that if you're going to, you kind of have to get your money back, unless you willing to come in for a couple years, as a sort of filter for. And I know that yes, been
working on that on a UI for the deposit contracts that makes its year. But, you know, seven types of warning that you're lucky. You're fine, then you need to validate and one things, may be a few chickens speak to this better than me, but I know that if to spec tries to take into account, the fact that most people valid they are not in a professional devops people with 99.9 9% uptime and in-depth on net. If you're up, I believe I saw me, check the stack it was something like 2/3 of the time. Your reward should be deposited. So you might get / some small amounts, you
know, if if you're online at a bad moment. But that the aim is that for someone who's online more than 2/3, But even the time they would still have enough to reward at the end. Editor, did you I know you do two things. One building on Tim's Tim's arguments. We're definitely respect and 1/2 just because you were offline for the bit unless there's an extended. Of time that you are disconnected from the network or you explicitly do something bad or does a bug in your software, that
is no expectation of being /. The other part is he threw staking is at this stage. I would caution our listeners about just anticipating and it has a detail like stickers. It definitely takes some some amount of technical expertise to understand the client software and how to run it and the best practices for doing so. So I would definitely question everyone before they entered into this. Excellent. So we have just about 5 minutes left and I have to two questions that I really want to ask. So one add you to this is kind of just for you here as we
work. Something. Why is if you ain't taking so long to launch and had so many delays, If I get questioned. So up till about 18, 12 to 18 months ago. The progress was such that each Milestone. We had some substantial like in your mentality, search updates. And at each step of the way, it made sense to incorporate, wait for the research to be finished and incorporate those changes into the new system that would be launched. But like about 12 to 18 months ago, we stopped having those kind of my Stones where breakthrough
research is happening. And from that point on it became just like became a race to implementing the software and then watching the midnight. So right now we had no stays where everything is in the hands of the client implementers. The minute the, the time to mean that is a factor of how fast the client implementations can be polish. Text line and then 4 minutes left in. This is a, this is a really tough question because it's highly debated. But let's see, let's see what you guys can do with. It is proof of stake more centralized than proof of work.
So just really briefly. I'd like to say that it is a philosophical difference between preferred and proof of stake in how they operate. But I think he's a little bit more decentralized just for the reason that the operational expense is little bit lower and basically you don't need the physical space, you don't need to maintain a server or anything of that sort. So it seems to me that, you know, at some point in the future is retail, investors are speakers, might be able to participate and provide security to the network and returns
for staking rewards. That seems to me that we were steak is more decentralized Brokers. There's a philosophical difference between help with purple and blue. Awesome. Anybody think? I think it's a busy depends on your definition, right? Like people were, this is one of those topics where the argument is not a bad, which one is more decentralized. The arguing is more about How do you define dissonant life depending on your decentralization? Like a definition one might be better than the other eye because
fools happen and then certain companies might be more efficient that refusing to walk hardware. And and so on, I'm more in the camp from a, from a security perspective that you're destroying electricity and you're burning with all that burning process, like this there, for a good reason, like there are bootstrapping problems and other other other security issues. And obviously, I'm biased, because we've been working on a almost like a variation of proof of stake that derives, its benefits from proof of work, right? We anchored into the Bitcoin, can we benefit from the security of
what is the Statewide system where people can learn the war? So I think it said you're not wrong to say that it would be a very high. I I really like how you phrase that to just because I have, I have seen firsthand how just people use different arguments and they are different there. Different faces for their definition of decentralized central at. So that's an awesome, their Tim. We got about one more minute. You have anything to add sure. So I'll make it kind of a point both if they were proof of stake and proof of work.
So I think that one of the nicest thing is about proof of stake is because it's purely digital, right? There's no economies of scale. So if I run my 1 GPU Miner in my apartment, I'm much less efficient than somebody running like a Datacenter because of the economies of scale, whereas if I run 32 Easter on steak and you know, I did tell Brands 3200, we can see the while skating. He can't fight steak better tonight than I can either have. The one thing that paperwork has a steak that's in the is you can verify it
offline like you can't stake and that's another question but the fact that, you know, you can just verify this complication and and no just by looking at it that it's the right. One is like a really strong property. I think it sometimes underrated. Excellent. Well thank you so much everybody for for coming on. This was awesome and audience, so be sure to tune in for the rest of the panels that we have gone. And thanks everyone.
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