Ethereum Market Outlook: Vitalik Buterin sheds light on ETH 2.0 scalability. ETH/USD freefall continues as price drops below SMA 50
- Ethereum 2.0 will be able to handle 100,000 transactions per second, according to Vitalik Buterin.
- Ethereum has received heavy criticism for its low throughput before.
- ETH 2.0 is designed to improve scalability as it shifts from proof-of-work to proof-of-stake consensus mechanism.
- ETH/USD bears remained in control for the second straight day.
Vitalik Buterin, the co-founder of Ethereum, recently said that the switch to ETH 2.0 will not occur overnight but will gradually scale the network to handle 100,000 transactions per second (TPS). He noted that Ethereum will likely rely on rollups as the network transitions to ETH 2.0, meaning that second-layer solutions will advance the network’s speed before upgrades are implemented into the blockchain.
ETH2 scaling for data will be available *before* ETH2 scaling for general computation. This implies that rollups will be the dominant scaling paradigm for at least a couple of years: first ~2-3k TPS with eth1 as data layer, then ~100k TPS with eth2 (phase 1). Adjust accordingly.
— vitalik.eth (@VitalikButerin) June 30, 2020
Many experts have criticized Ethereum earlier because of its low throughput. CryptoKitties game was widely blamed for slowing down the network and causing issues for users trying to send or receive ETH. Last year, Buterin had acknowledged that scalability could be a problem for Ethereum. He had said that he was aware of the issues that could arise from the lack of scalability.
Scalability is a big bottleneck because the Ethereum blockchain is almost full. If you’re a bigger organization, the calculus is that if we join, it will not only be more full but we will be competing with everyone [else] for transaction space.
There is pressure keeping people from joining, but improvements in scalability can do a lot in improving that.
ETH 2.0 is designed to bolster the blockchain’s scalability and performance as it shifts from proof-of-work (PoW) to proof-of-stake (PoS) consensus mechanism. ETH 2.0 will be launched in phases. In May, ETH 2.0 testnet coordinator Afri Schoedon had said that based on the present progress of the project, phase 0 is expected to take place by the end of 2020.
Ethereum daily chart
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ETH/USD bears remained in control of the market for the second straight day as the price fell from $226.50 to $226.12. In the process, the price dropped below the SMA 50 curve. The Elliott Oscillator has had three consecutive green sessions, while William's %R is trending around -69.35, next to the oversold zone.
Support and Resistance
If the ETH/USD bulls want to stage a comeback, they will need to overcome resistance at $227 (SMA 50), $230.65 (SMA 20), $238 and $248.15. On the other hand, the bears need to conquer support levels at $225 and $220.35.
Key levels
Author
Rajarshi Mitra
Independent Analyst
Rajarshi entered the blockchain space in 2016. He is a blockchain researcher who has worked for Blockgeeks and has done research work for several ICOs. He gets regularly invited to give talks on the blockchain technology and cryptocurrencies.
