All blockchains undergo big changes over time, but some have evolved as dramatically as Ethereum (ETH). Among the most transformative of these changes are the hard forks it implemented, which are all vital to the current state of the crypto world. It started with the potential Ethereum brought to the blockchain community as a smart chain.
Ethereum kicked off the 2nd generation of crypto, one that is revolving around smart contracts. Other blockchains like Solana (SOL), Polygon (POL), Polkadot (DOT), and Tron (TRX) followed its example and expanded on its ecosystem rather than compete with it. Even so, Ethereum still stands at the centre and the 2.0 update is its biggest contribution to date.
One of the key reasons behind Ethereum’s enduring importance in crypto is being the first in the scene so more people have adopted ETH than any other smart chain. You can see this is true among the top Bitcoin casino sites and exchanges always supporting ETH but not the others. Even with its popularity as Ethereum 1, the 2.0 overhaul still needed to happen. Here’s why:
Why Ethereum 2.0 overhaul need to happen
Ethereum launched in 2015 when Bitcoin (BTC) was still fresh and niche in the world of digital currencies. Since then, it thrived not only as the top alternative coin (altcoin) but also as a platform for decentralised apps (dApps) and smart contract projects. It was later primed to be the foundation for Web 3.0 with a growing number of users and layer 2 blockchains.
However, Ethereum’s old Proof-of-Work (PoW) system couldn’t keep up with its scale and the demand for better processing power. Developers needed an overhaul for a more energy-efficient consensus mechanism and better tools to offer users. Thus, the Ethereum Beacon Chain launched in 2020 parallel to the mainnet leading to the Ethereum 2.0 update in 2022, also known as the Merge.
The demand for a more energy-efficient blockchain has been a concern since Bitcoin started gaining popularity in 2012. It was later propagated when Litecoin (LTC) and Ethereum started getting more trade activities. ETH founder Vitalik Buterin and his team already started working on the 2.0 platform to use Proof-of-Stake (PoS) because they agreed with the concerns.
The Ethereum Beacon Chain was favoured among users because it uses 99% less energy than the old PoW system. It is therefore faster, cheaper, and more scalable, opening avenues for a bigger ecosystem. These improvements also made the blockchain more user-friendly, increasing adoption as it is embraced by the top Bitcoin casinos and game developers alike.
What are the challenges that held back Ethereum 2.0?
Ethereum 2.0 is overall a better network than the original version. However, it is still met with big challenges that its developers and investors need to overcome like the following:
Gas fees and scalability concerns: Ethereum’s gas fees are notorious among traders. Most people cannot complete a transaction without relying on layer 2 solutions to reduce fees or find alternative networks. Networks like Polkadot and Polygon have better scaling solutions, enticing developers to sometimes migrate platforms.
Full implementation of sharding: Ethereum has introduced dank sharding as a scaling solution. However, the result is still slow and its complexity requires high processing performance. Ethereum developers prioritise security and functionality so the sharding method cannot be rushed the way it is now.
Inconsistent economic performance: Bitcoin sets the benchmark for success in the crypto industry and Ethereum has been inconsistent. It is in an upward trend before 2025 starts but traders aren’t confident in its resilience. Especially now with various alternatives solving the issues it raised.
Is Ethereum 2.0 a trendsetter in the crypto world?
Ethereum (2015) was the trendsetter of the smart contract blockchain but Ethereum 2.0 took inspiration from its alternatives, like Polkadot. Even so, Ethereum still remained the primary pillar of the decentralised ecosystem. That’s why so many projects rely on the network to pull through with their plans to implement danksharding and other technologies.
The Ethereum 2.0 update, on the other hand, has some good ideas but is yet to fully implement them. It is still possible for 2025 to be the year for the network, especially now that the exchange-traded funds (ETF) for spot ETH were approved in July 2024. The crypto is likely to increase trade volume on top of its already high activity around the top Bitcoin online casinos.
Ethereum isn’t in such a bad spot, all things considered. These are challenges all networks have to face, especially when they’re one of the biggest blockchains in the industry. Ethereum 2.0 faces resistance because it is pushing boundaries that no other platforms are undergoing.
However, they still need to push through for the sake of their investors. Ethereum is only as good as what developers can do using its resources and they need to do them in an affordable and reliable manner. Otherwise, international adoption will continue to be a challenge for what should be the centre of Web 3.0, the future of the internet.
When done, they will face more challenges to overcome and other developers can take inspiration from their decisions to be better. Thus, contributing to the blockchain industry in a grand scale that no other networks can. Ethereum is a trendsetter in the same way Bitcoin is a benchmarker in the crypto industry and is poised to continue to be one in 2025.
