Countdown to Ethereum 2.0’s London hardfork begins…JP Morgan on the lookout

London hardfork, a major update to Ethereum 2.0, is to begin during July. Ethereum 2.0 is an extensive update for switching from proof-of-work to proof-of-stake. Proof-of-work (PoW) means the method of validating blocks through a mining machine. Bitcoin is a representative digital asset using the PoW. Proof-of-stake, on the contrary, validates blocks according to the validators’ shares. Industry officials forecast that a more energy-efficient network will be established once the Ethereum 2.0 update is completed.

Ethereum 2.0’s London hard fork, why is it getting attention?
The roadmap for Ethereum 2.0 upgrades consists of four steps: Frontier, Homestead, Metropolis, and Serenity. Update has been completed up to Metropolis, and the final Serenity update is currently ongoing. In each of these steps on the roadmap, a few rounds of hardfork are implemented. The Byzantium hardfork, which took place in December 2017, was one of the major hardfork updates for Ethereum. This update reduced the block reward from 5 to 3 ETH but instead postponed the difficulty bomb by about a year and a half.

A similar update was the Berlin hardfork in last April, which included an upgrade to reduce the network transaction cost. London hardfork is another update aimed to improve the Ethereum network. However, the main reason why it is receiving more attention than other hardforks is its large scale. Many members of the Ethereum community are having high hopes as London hardfork is expected to apply the improvement proposal (EIP-1559) for resolving one of the deep-seated problems of the Ethereum network, the fee issue (high gas fee).

Ethereum 2.0, staking is available now… What are its future directions?
Once Ethereum 2.0 is completed, anybody can become a validator by just staking Ethereum without having to use a mining machine. However, one needs to stake a minimum of 32 ETH to become a validator and get rewarded for block validation. The reason for setting such an entry barrier is to prevent users from abusing the system to their advantage.

Although the Ethereum 2.0 update is not yet complete, its staking service has already started in December last year. Anyone who has 32 ETH can currently use the Ethereum staking service. There are a few limitations, of course. One can withdraw staked ETH or reward only after the 1.5-step update for Serenity is completed. Before that, such withdrawals cannot be made. Ethereum community officials are expecting the 1.5-step update to be fully implemented in 2022.

Then, when will the Ethereum 2.0 upgrades be completed? Ethereum developers have not given a specific time frame for completion. But the founder of Ethereum, Vitalik Buterin has said last June that it will take at least until the end of 2022 to secure scalability.

Ethereum staking will grow to reach 40 billion dollars by 2025, according to JP Morgan
With the large-scale Ethereum update approaching, the global investment bank JP Morgan is showing keen interest. In its recent company report, the company forecast that the launch of Ethereum 2.0 will propel the growth of Ethereum staking to reach 40 billion dollars by 2025. The company’s CEO Jamie Dimon took part in the report, attracting attention of cryptocurrency market participants.

According to the report, JP Morgan is having eyes on Ethereum mainly because it sees the cryptocurrency to have higher energy efficiency than Bitcoin. JP Morgan also saw that the staking service could become a new means of making money.

The company predicted the Ethereum stakes to accumulate to about 20 billion dollars within the quarter after Ethereum 2.0 is launched.