Everyone is excited by the prospects of Ethereum 2.0, but the transition towards this new chain will prove complicated. It seems very likely that both ETH 1.0 and ETH 2.0 will be trading simultaneously and exist as separate tokens for a time.
Let’s think back to 2016—it was the year of the DAO hack when 3.6M ETH was stolen. The consensus then, among a large portion of the community, was to conduct a hard fork. Ethereum (ETH) today is essentially a forked version of the original chain due to this controversy, and the leftover chain became what is known today as Ethereum Classic (ETC).
ETH 2.0 v. 1.0: A Repeat of 2016?
Once Ethereum 2.0 is rolled out officially, the leading smart contract platform will find itself at a similar crossroads. Could we have a situation where ETH 1.0 and ETH 2.0 co-exist, with different prices on exchanges, during this awkward transition period? If we are to learn anything from the DAO hack and how it created both Ethereum Classic and Ethereum, this seems not only possible but likely.
As grubles (@notgrubles) brings up on Twitter, this has played out before in 2016 and we need to be cognizant of the fact that it may happen again. ETH 1.0 will arguably still trade after the beginnings of ETH 2.0 are rolled out—and, with each chain being separate, we could see two different ETHs trading on exchanges for a while. This means that we would have ETH 1.0, ETH 2.0, and ETC all trading at the same time.
Vitalik Buterin has claimed that the ETH 1.0 chain will “technically continue” but will die out due to being “valueless.” However, in the beginning, ETH 2.0 will effectively be ‘valueless’ because phase 0 won’t support the full extent of the network at the start. We will likely see some confusion which will be reflected in chaotic market prices of ETH 1.0 tokens and the new ETH 2.0 tokens.
Grubles even goes as far as to claim that “ETH2 will be valued less [than ETH1] for a relatively long time” because of phase 0 being useless in the beginning.
The Road Forward Will Prove Difficult
Let’s not mince words: Ethereum 2.0 is desperately needed if Ethereum ever wants to be viable on a commercial level, and create applications that can benefit the world. As of now, Ethereum has failed to scale which has caused considerable headaches for enterprises wishing to use the network.
However, the transition to this much-needed upgrade will be rocky. One cannot unilaterally stop the trading of Ethereum 1.0. This means that there will be some inevitable tension between the new Ethereum 2.0 and the old chain.
So, Ethereum developers should acknowledge this problem, and confront it head-on, rather than assuming that the Ethereum 1.0 chain will just ‘die out.’ It won’t.
Do you think that ETH 1.0 and ETH 2.0 will co-exist for a time? Let us know your thoughts below in the comments.
Images are courtesy of Twitter, Shutterstock.