Ethereum’s ecosystem has constantly been developing recently. Since the network is one of the most blended and developers, as well as regular people, are trying to change the platform for the better, more updates are awaited. Given these developments, ETH prices have surged, so it’s the best time to buy Ethereum with either a credit card or bank deposit.
These constant updates came right after Ethereum’s Merge that changed the blockchain forever. Not only it helped Ethereum become more sustainable with approximately 99.95% by minimizing energy consumption. This revolutionizing change happened as the blockchain’s old proof-of-work consensus system became proof-of-stake. The Merge made it easier for users to perform transactions while developers had a new and faster ecosystem they could work with.
Let’s see what we should expect regarding Ethereum’s most interesting upgrades in 2023.
The Shanghai update is to be released in March
The Shanghai update is the most awaited this year, as it will pave the way towards a well-developed blockchain. A primary feature of Shanghai will allow ETH stakers to withdraw their staked coins and other rewards. This is followed by the Beacon Chain solution through which users develop a better validation process.
Here’s what other aspects of the Ethereum ecosystem will be renewed:
- Individual liquidity providers will be able to redeem their ETH, which will make the blockchain more user-friendly regarding liquid staking platforms;
- Ethereum will become the archetype of staking protocols as Lido, Rocketpool, and StakeWise will provide more minted tokens for liquid staking;
- ETH liquidity users will be assured of security more as committing to stake won’t be as risky and unstable;
On the other hand, this update will create some centralization points since new stakers may choose to stake through crypto exchanges and other providers. But as the blockchain continuously develops, we expect this issue to be solved, and decentralization will continue ruling the network.
Bedrock will be the new Optimism
Another upgrade expected to occur in March-April will make Bedrock take Optimism’s place. The previous layer two scaling system was built for Ethereum’s Virtual Machine (EVM) on top of the first layer to reduce fees and make transactions faster. But considering that Ethereum can process around 30 transactions per second, which is substantially less than other less-known blockchains, the second scaling layer will be changed into Bedrock.
This restoration will decrease transaction fees, increase speed and deepen compatibility with the EVM. The scaling solution will be stacking transactions and then sending them back on the blockchain as a single one so that the network will be less congested.
Bedrock won’t affect end users or have any other negative impact, but it might take some time for it to take Optimism’ place. At the same time, security will be maintained, so users won’t have to worry about their information and wallets being leaked or compromised.
The ZK-rollup competition continues
Rollups are yet another layer two system solutions that help blockchains get faster. If installed properly, they can make any slow network more rapid. Optimistic and ZK (zero knowledge) are two of the most known and used rollups. While Optimistic is quick, it might be slower when it comes to withdrawing funds. On the other hand, ZK-rollups are more complex but provide many other benefits compared to Optimistic ones, such as speed and security. Although ZK-rollups are mainly linked with Ethereum, Polygon is to publish its own protocol this year, which can compete with Ethereum’s.
However, these system solutions have their drawbacks. For example, they’re made through smart contracts, which can contain bugs as the rollups are relatively new on the Ethereum mainnet. Another issue that will be changed at some point in the future is the solutions’ tendency to become centralized, as sequencers can technically censor or re-order transactions.
Fortunately for users, rollups are easy to use. They only need to bridge their funds to the layer two networks and complete any transactions, whether it’s buying or selling cryptocurrency or NFTs. Optimism, for example, is believed to be quite a good investment, so if you’re curious, you may check it out on exchange platforms.
Why are Ethereum updates important?
In simpler terms, Ethereum’s updates are essential because they make the ecosystem a better place for users and investors. As the blockchain will be easier to scale and security and sustainability will increase, Ethereum will be trusted and chosen as the primary cryptocurrency and blockchain solution.
But this whole movement tries to pave the way towards cryptocurrency acceptance. Many people are still skeptical when it comes to buying crypto or investing in digital assets since these blockchains are a new technological development and have their issues. As challenges are addressed more, Ethereum’s popularity increases and builds a stable and reliable “brand”.
Cryptocurrencies are still not regulated, although some countries, such as El Salvador, have approached a shift to a crypto-based economy; up until now, it has only shown that the world is not ready to commit to such change. That’s because people are not fully educated on the matter, and they also fear the consequences of a volatile currency.
But blockchains still need more time to perfect their systems and technologies to ensure 100% security. Fortunately, Ethereum and many other ecosystems are fighting to provide the best services and platforms that allow people to get incentivized but also create and design applications.
Ethereum was, from the start, a special kind of cryptocurrency and blockchain that differentiated itself from the rest of the market. But with great features comes significant challenges, so Ethereum’s developers have to work hard to make the network stable and design a user-friendly surface so that anyone can access and use Ethereum.
Final thoughts
Ethereum is currently the second-best and most-used cryptocurrency on the market. Although Bitcoin surpasses it, Ethereum is by far a unique asset and blockchain that can revolutionize the crypto industry. And as 2023 unfolds, more updates and special features will be added to Ethereum’s system to make it safer, faster and cheaper.
