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The Future of Digital Finance through Ethereum Development

Ethereum positioned itself as something large-scale, on a par with ‘the world computer,’ but at the moment, the situation is such that it still needs to be defended. This was a rather loud statement from a relatively young platform, but Ethereum is moving in the right direction, and very soon, we will be able to call this structure the “World Bank,” all thanks to the improvement and modernization of the consensus mechanism and decentralized financing.

Predicting Ethereum’s Future Position

More recently, Binance Research presented its report, which analyzed the mechanism of consensus of evidence of rates (PoS) on the occasion of the expected significant breakthrough in the development of Ethereum in 2020. The preamble is a discussion of important changes in the cryptocurrency ecosystem, and the world’s second-largest digital asset will lead.

At the same time, the situation of environmental problems, and more specifically, excessive consumption of energy resources, in the end, will lead to the loss of evidence of work in the form in which we know them (PoW). Given the excellent theoretical and mathematical base, it still shows itself as an extremely inefficient element due to its needs for a solid background, and more specifically, in large-scale equipment and energy sources.

So what exactly is PoS? This can be described as a deduction mechanism to support blockchain operations through an incentive process equivalent to block rewards. As with the existing number of blockchains and healthy competition, Ethereum is not the only blockchain that can switch to PoS, but it is worth noting that it, without a doubt, is a giant in its way, which means it has the most significant influence and sets trends.

Because of the planned implementation of PoS in the updated ETH 2.0, the release rate is likely to be significantly lower. Still, it is worth noting that, according to analysts, the expected emission level will come to a flat schedule after the structure is included in the leading network.

Well, with the transition of such a scale, the risks become great, since everything should work as the most harmonious mechanism in perfect balance. In the case of a low incentive for a bet, the network may not even receive the minimum number of validators, without which the regular operation of a system of the chain of blocks and segments is impossible. The same risk will arise in a proportionally inverse situation – when the incentive is excessively high.

Although everything has its nuances, and here, too, there are a couple of points that need to be considered before participating in this as a validator. Computing resources will be required to run the validator clients and beacon nodes, and a broken ETH should be blocked. ETH delay can be delayed until it is released, and it, in turn, will be valid for approximately 18 hours. The network load determines this condition at the time of the transaction. Do not forget about the grooves in the security system in the process of using the software, which, as a rule, are not paid due attention to the user side of the platform.

In any case, we would like to give a few more words to the DeFi structure as another direction in the possibilities of obtaining cryptocurrency profits. You might be familiar with names like Maker, Compound, and Dharma. If not, then as a clarification, these are decentralized financial applications that offer platforms to block or provide ETH, using smart contracts as a reward. According to Defipulse.com, $ 615 million is currently blocked in decentralized financing based on Ethereum. It is worth noting that in this number, Maker occupies more than half of the total.

Summing up all the above information and returning to the question asked at the beginning about the future of Ethereum, it will undoubtedly be based on finances, and, given its strong position as a giant in the crypto ecosystem, it is unlikely to be usurped shortly. Well, we can add that at the moment, the Ethereum rate will be a good move, given the current financial policy situation and the existing banking crises.