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Prysmatic Labs Launches Ethereum 2.0 Proof of Stake TestNet

Ethereum 2.0 Testnet Proof of Stake

Prysmatic Labs co-founder Preston Van Loon announced the launch of an Ethereum 2.0 Proof of Stake (PoS) blockchain Testnet on May 7.

While the full transition for Ethereum away from its current Proof of Work algorithm to a Proof of Stake blockchain is still over a year away, the testnet launch by Prysmatic labs represents a positive development for the currency. According to Van Loon in an update published to Medium,

“It’s here it’s here! Over the past months we’ve been preparing extensively, working every single day to deliver a public testnet for Ethereum 2.0’s proof of stake beacon chain to the community. We have it, it’s live, and you can stake! This is a non-trivial, critical step to take this technology to the next level, and we need you to be a part of it.”

As opposed to most cryptocurrency overhauls, which involve the creation of two currencies in following a hard fork of the blockchain, Ethereum 2.0 is being developed as a transition for the existing cryptocurrency. While there are a number of features that will be rolled out in updates over the next sixteenth months, Proof of Stake is being billed as the solution to ETH’s scalability issues. In addition, the algorithmic shift will make Ethereum 2.0 more secure and decentralized, while allowing users to stake their coins to improve the overall network experience.

In return for “staking” coins in their Ethereum wallet, users will receive a dividend similar to the interest paid on a savings account. However, while the PoS transition is being hailed as a monumental development for the second ranked currency by market capitalization, not everyone believes 2.0 will launch as smoothly as expected.

Speaking on a conference panel earlier in the week, Messari CEO Ryan Selkis predicted that the Ethereum 2.0 launch would not occur until 2021 at the earliest, compared to the 2020 timetable given by ETH core developers. Selkis claimed that Proof of Stake integration would lead to delays, and believes the currency is fine operating for the next several years under its well-tested Proof of Work algorithm.

Prysmatic Labs’ launch of an Ethereum 2.0 testnet, while currently limited, gives a vote of confidence in the overall transition to Proof of Stake. The update posted to Medium highlights sharding as a major development for Ethereum moving forward, which function as individual chains managing smart contracts, transactions and more.

Van Loon explained,

“A core concept of Ethereum 2.0 is the idea of shards, which are individual chains that manage smart contracts, transactions, and state. These shards are coordinated by one root chain, known as the beacon chain, which is what phase 0 of Ethereum 2.0 implements. Having shards allows for horizontal scalability of the system, as transactions can be processed in parallel compared to the current Ethereum proof of work chain.”

Prysmatic reports that the present version of the testnet is fully accessible to the public, and is not a simulation of the blockchain. Users are free to participate in maintain the network and deposit ETH into a deposit contract for staking or run a validator client. The full list of features and instructions for joining the officially live network can be found here.

The post Prysmatic Labs Launches Ethereum 2.0 Proof of Stake TestNet appeared first on Ethereum World News.

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ICOs Being Blamed for Ethereum (ETH) Sinking Price

Ethereum (ETH)–After a 16 percent decline in value over 24 hours, the price of Ethereum sunk to its lowest point in nearly a year. Trading a $265 as of writing, the second largest cryptocurrency by market capitalization has completely retraced the gains made following the beginning of the year’s massive bull run. While some have pointed to the overall state of the cryptomarkets as being bloated and unhealthy, with altcoins across the board experiencing double digit losses on the week, the head of crypto hedge fund BloomWater Capital is placing the blame on ICOs cashing out.

As Bloomberg points out, the massive number of ICOs being built on the Ethereum blockchain was the primary catalyst for Ether’s price gain throughout last year, in addition to the significant amount of development interest it generated. Now, the very same usability is leading to price decline that is outpacing Bitcoin, as investors who were previously purchasing ETH to participate in Initial Coin Offerings (ICOs) are staying out of the market.

Considering that the majority of ICOs to come out in the past year have been built as ERC-20 tokens, it has made sense for investors to buy in with existing Ether coins. In addition, Ethereum has lower mining fees and faster average transaction times than Bitcoin, while still being a highly recognized coin. While previous reports have seen the ICO market double in volume through the first half of the year over 2017, existing ICOs are cashing out in massive volumes to cover the costs of the sinking crypto market. The result is a forced selling of Ether, driving the price of ETH down ahead of other top of the market coins like BTC.

Biswas Das, director of BloomWater Capital, blames the amateurish development filling the ICO space, which has far less regulation than typical startups and overall lower barrier to entry–both contributing to headaches for investors and would-be project speculators,

“These startups are raising a lot of funds but they don’t have treasury management or enough cash management experience, so they’re selling too early and causing a lot of pressure in the market. It was fine last year but right now the the market is so fragile that it causes a lot of pressure.”

As Das puts it, the fragility of the current market is unable to withstand the forced selling and downward pressure of ICOs cashing out to cover costs, causing Ethereum to drop to price levels not seen since the middle of last year. Bloomberg also points out growing concerns over the ability of Ethereum’s network to handle transactionary volume in addition to the ICO’s being built on the platform. The end result has been other platform-focused cryptocurrencies springing up in the interim, such as Cardano’s ADA and TRON’s TRX, to fill the void in investor skepticism over Ethereum being capable of handling the development volume.

Bloomberg also quotes Spencer Bogart of Blockchain Capital LLC, saying that general disillusionment in ICOs, in conjunction with growing stories of scams and outright profiteering has caused some backlash towards the platform that hosts the ERC-20 based tokens,

“Investors are increasingly disillusioned with tokens and ICOs, most of which have been launched on top of Ethereum and we’re seeing this play out in the market with continued downward price pressure.”

ICOs have managed to thrive despite the bearish market of 2018, however not without controversy. A study published earlier in the year found that 80 percent of ICOs could be classified as ‘scams.’