Juan Nuvreni from Crypto Sheinix has starred in the latest Bit2Me Expert Session in which this professional spoke about Layer 2 and Merge of Ethereum in his interview and discussion with Javier Pastor.
Who is Juan Nuvreni?
Juan Nuvreni is a programmer born in Buenos Aires who currently resides in New Zealand, passionate about Bitcoin and blockchain technology, he was the latest protagonist of the Bit2Me Expert Session. This professional has a training academy and a YouTube channel with which he works every day to educate the community around the crypto world. including all the news and new alternatives that appear about decentralization, Bitcoin, Ethereum and the crypto and blockchain world in general.
What is layer 2?
In last Tuesday's special program Nuvreni spoke about Layer 2, the system or protocol built to function in parallel to the blockchain or layer 1 for which it has been configured. This type of system is designed to allow users to carry out operations quickly and completely economically. and that these operations are stored in the blockchain designed to support the operation of the L2.
Layer 2 basically seeks to improve the scalability of the target blockchain of each system, offer more space to be able to carry out transactions economically and maintain the security of transactions and decentralization. In this Expert Session we talk about layer 2 of Ethereum.
What can we find in this Expert Session?
Pastor and Nuvreni began the Expert Session by discussing the differences that make Bitcoin and Ethereum different technologies for the guest. Juan Nuvreni explained how Bitcoin is a type of strong and resistant technology, but inflexible and much slower, with PoW as a consensus mechanism while Ethereum was born as an alternative to that inflexibility of Bitcoin designed to be able to function more quickly at the development level. Ethereum is something different that fulfills a role that Bitcoin cannot natively fulfill due to these limitations in the language.
The change of the consensus protocol in Ethereum 2.0
Ethereum was born with PoW as a consensus mechanism, like Bitcoin, but from the beginning its migration to PoS was planned with the aim of reducing energy consumption and promoting the creation of more validator nodes to improve scalability at a general level. the speed and functionality of this network. Although this migration was planned with a view to about two years from the creation of Ethereum, currently (around eight years after the appearance of this network) work is being done to facilitate this protocol change and it is expected that this migration will be completed in 2022. produce this natural evolution in Ethereum.
One of the reasons why Ethereum did not use PoS from the beginning was security, since this algorithm had not been tested, but little by little with the arrival of more networks with these characteristics it was put to the test and currently it seems a much more interesting alternative for this network.
Nuvreni also explained the payment system or operation of the Ethereum structure: a system that incentivizes miners through the gas model. When users make a transaction within Ethereum (such as a smart contract) they must pay a gas that they can choose from a minimum. This way miners can position transactions with higher gas ahead to obtain a better profit.
As Nuvreni explained, as this mechanism becomes increasingly less sustainable at layer 1, if Ethereum's objective is to become the global settlement layer for all financial applications, because this procedure involves the payment of large commissions when the network is encounters a high demand for users who seek to have their transactions processed first, the natural evolution of Ethereum to 2.0 undoubtedly becomes essential to continue adapting user demand to this new type of technology.
Types of nodes and how to participate in Ethereum 2.0
With the arrival of Ethereum 2.0 we will find Full Node validator nodes, which will have the necessary economic power to participate in the production of blocks on the network. The access-only Light Nodes, nodes that are capable of accessing the ETH 2.0 network, storing and processing the validation of the blocks produced by the validators and the archive nodes, which will continue to exist with Ethereum 2.0 to be able to maintain accurate and complete copies of the state of the blockchain and its history.
Furthermore, Nuvreni and Pastor explained in the Expert Session that in order to participate in the network as a validator it is necessary to have 32 ETH, with a CPU with at least four cores, a RAM memory of at least 8 gigabytes, broadband, stability in electrical service and a climate-controlled and conditioned space, but as a general rule it is not a complicated procedure.
At a technical level, Nuvreni explained that there is not a great risk because each user has their private keys, but rather the final risk has more to do with the level of security that each user takes as a validator. In centralized services he explained that there may be more risks, but at the level of the change from PoW to PoS this expert does not really see so many risks, although it is a delicate procedure that must be carried out professionally and taking appropriate security measures. .
As Nuvreni related, currently the Ethereum PoS blockchain is already working, validators already exist, blocks are being produced and staking is possible. In addition, the guest also reported that there are no indicators that the fees will go down due to moving to PoS, but rather they will do so due to L2 and sharding, while users will be able to continue paying fees for using the premium L1, the safest. and that it will continue to have liquidity. Likewise, he also explained how this evolution will also be scaled with other technologies.
ETH emissions are going to go down with PoS. The issuance of ETH per block will be reduced, which will translate into a reduction of around 90% of the network which, added to other improvements such as fee burning, can make Ethereum deflationary at times when it is used a lot. the network, which will make it a more valuable asset and will cause the use and value of the network to be transferred to the underlying token, which will benefit the validators and make the network more economically secure.
What is going to happen to the old Ethereum mining farms?
Pastor also asked Nuvreni for his opinion on what will happen with the migration and network change with Ethereum mining farms. This expert explained that the normal thing is that each miner has to decide. When it switches to PoS, the mining difficulty will begin to increase and miners will have to decide if they want to continue with Ethereum classic, whether to fork Ethereum with PoW, whether to move to Ethereum 2.0 or whether to change the network... Currently the community is quite divided between those who want to switch to PoS and the classic miners who do not want to change because they have been securing the network for many years and generating rewards with PoW. In most cases, users who mine on other networks do not find it too expensive to change algorithms and plan to move to other blockchains or stake.
When are these news on Ethereum?
In conclusion, L2 is Ethereum's bet to scale the network, provide security and continue on the path to decentralization by adding a layer above so that users can use the apps and pay fewer fees while continuing to accept transactions in the L1 of Ethereum. Merge changes the consensus algorithm, while the Ethereum Virtual Machine continues to function.
For this expert, changing from PoW to PoS will be a before and after for the Ethereum network, along with the implementation of Layer 2 because it will revive the network and attract a large number of people who left Ethereum when prices began to rise. fees, as well as new users interested in this project and its news.
Finally, Juan Nuvreni also explained that the Ethereum network will continue to make more changes because it is not yet in its final form. In fact, there are up to three more stages that can be seen in the Vitalik Roadmap and that will help users. Furthermore, as a final note, he noted that there will always be alternative block chains but that they all entail more risks than Ethereum and Bitcoin and highlighted the importance of the community and having users involved above leaders or regulators in this type of projects, pointing out to “before the end of the year” as the date on which we will be able to see all these changes in Ethereum implemented (currently tests are being carried out and the bugs found are reviewed before starting to fully implement all these improvements and changes).
