Weiss Ratings, a recognized independent rating agency, has commented about Ethereum’s (ETH) development and how it could be constrained by the lack of scalability. A few days ago, the co-founder of Ethereum, Joseph Lubin, talked about which are the main problems that crypto projects are currently facing.
Ethereum Has a Slow Base Layer
Mr. Lubin described the way in which Ethereum 2.0 is going t be working and improving transactions around the world. He said that Proof-of-Stake (PoS) provides a more decentralized scheme that Proof-of-Work (PoW) algorithms. As he mentioned, multiple nodes of PoS systems can be established without the need to set up hardware and how to improve its profitability in the system.
Lubin has also mentioned that the Casper improvement is already live on the Ethereum Beacon chain. There are 8 teams building their own implementations there. With this improvement, the blocks will be produced every sixteen seconds. This will be allowing stakeholders to validate transactions and receive a reward for their work.
According to Weiss Ratings, Ethereum’s main chain is slow and it faces scalability issues that will be limiting the development of Ethereum. The only path forward for the Ethereum Network is to move towards a global settlement layer rather than providing a platform for smart contracts and decentralized applications (dApps).
On April 13, Weiss Ratings wrote on Twitter, that the network has no other path forward for it more than moving towards a global settlement layer.
Joseph Lubin, co-founder of #Ethereum, says the network goal is to gradually evolve into a global settlement layer. Well, the base layer is so slow that there’s no other path forward for it. #ETH #altcoins #crypto
— Weiss Ratings (@WeissRatings) April 13, 2019
With Ethereum 2.0 and the implementation of the Proof of Stake consensus algorithm, it will be possible for the network to start moving towards this goal. This will support and settle all the transactions in the network in a decentralized way. Nonetheless, the execution engine will also include the Ethereum Virtual Machine (EVM) and smart contracts that will be settled by the chains working with it.
Ethereum is currently the second largest digital currency in the market. It has a market capitalization of $17.25 billion and each ETH coin can be purchased for $163.