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Season 2, Episode 6

The Merge with Superphiz!

 

by | Aug 10, 2022 | ENS, Ethereum | 0 comments

Tokenizing real estate, block by block.

Today we talked Ethereum itself, down to the core. We dove headfirst into the current state, and cutting edge, of the ethereum blockchain with our guest, none other than Beacon Chain Health consultant Superphiz.

We had two co-hosts to help us out in Cryptoguy_777 and 5459.eth, because, not going to lie, we are moving up in weight class here. We have been training welterweight, and today we are very excited to have a heavyweight guest like SuperPhiz… especially right now.

Why now?

Ethereum is changing. Ethereum is of course a blockchain, run off the cryptocurrency ETH. For all practical purposes ethereum introduced the first functional programmable smart contracts, changing the world of computing forever in important ways.

Without a central authority as the ‘arbiter of truth’, blockchains have historically relied on a concept called Proof of Work, or POW. Literally ‘show me the math’ and whoever gets there first gets rewarded. So there is this global cadre of ‘miners’ all competing to solve complex math problems, which form the basis for the ‘consensus’ about the state of the chain and its ledger.

What does that mean? Agreeing to which account has what assets depends on raw computational power, which fundamentally speaking is energy. So, Proof of Work, the way that the existing Ethereum blockchain is ‘secured,’ is an energy based system.

Proof of Stake is instead an asset based system. ‘Stakers’ attest to the validity of transactions, and are themselves rewarded for doing so, and run the risk of being penalized or ‘slashed’ for bad behavior.

Ethereum is converting to POS, and it appears it is happening soon. The fact that it is happening at all is a bit miraculous and a fascinating tale in and of itself, which we’ll touch on briefly.

It is this ongoing effort, and the pending event of ‘The Merge’ which makes our special guest today so very special. With all of these events unfolding, the culmination of years of planning, testing, refactoring… it is a real honor to have Superphiz with us to talk about the health of the Beacon Chain and Ethereum in general.

Key takeaways:
Prater/Goerli network(s) are the last step prior to the planned merge, converting Ethereum to Proof of Stake as it’s consensus mechanism. The Proof of Work era for Ethereum will effectively end when that next block is approved on what is currently known as the Beacon Chain.

Health, in the context of a blockchain, is about decentralization. This is a term that gets used a lot, and sometimes it loses its practical context. Phiz brought the context, and he came loaded heavy, as he broke down his three Decentralization Missions:

  • Consensus Client Level Diversity (Mission Accomplished)
  • Liquid Staking entity Size Diversity (Mission In Progress – Recruits Needed)
  • Client Execution level diversity (geth needs friends – Mission scouting has begun)

These three factors play a huge role in assessing the ‘health’ of a blockchain. For example, pre-Phiz and the efforts of him and others in the community, there were only 4 consensus level clients for stakers running the Beacon chain to use. This is not enough diversity – if one client has a bug or malicious event, too much of the network is impacted… this was exacerbated by the fact that one of these clients, Prizm, had at one point 71% market share.

Having successfully diversified the consensus client market (I believe there are now 11 clients and the largest signle share is a manageable level), the battle is now primarily about diversifying the entities holding liquid staking. Too much of the staking pool is tied to too few entities… read more.

Practical takeaways & Suggestions:

Health, in the context of a blockchain, is about decentralization. This is a term that gets used a lot, and sometimes it loses its practical context. Phiz brought the context, and he came loaded heavy, as he broke down his three Decentralization Missions:

  • Consensus Client Level Diversity (Mission Accomplished)
  • Liquid Staking entity Size Diversity (Mission In Progress – Recruits Needed)
  • Client Execution level diversity (geth needs friends – Mission scouting has begun)

    Want to help?
    The best 3 ways in order currently:

  • Solo Stake with 32 ETH

  • RocketPool w/ 17.6 Ξ

  • Ξ to rETH on Uniswap

 

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Michael Seguin

Greg Souza

 

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