CoinDesk Podcast Network

The virtual event invest: ethereum economy takes place on Wednesday, Oct. 14. CoinDesk’s Christine Kim spoke to colleagues Michael J. Casey and Aaron Stanley about the most compelling and under-discussed topics about Ethereum 2.0 headlining next week’s conference.  

From the dynamics of staking to the architecture of sharding, there haven’t been many topics Ethereum 2.0 core developers have shied away from discussing over the past five weeks on “Developer Perspectives: Ethereum 2.0.” 

See also: 3 Things You Should Know Before Staking on Ethereum 2.0

Each discussion, however, has sparked new questions about the ramifications of Ethereum’s transition to proof-of-stake on the crypto markets and the broader blockchain industry. 

“There’s a lot of unanswered questions about how the markets are going to behave,” said Casey, CoinDesk’s chief content officer. “Do we end up with a split, [with] two versions of ethereum or at least two tokens that trade differently in the marketplace?”

Casey added that financial engineers in the decentralized finance (DeFi) space will likely seek to unlock the liquidity of staked ETH on Ethereum 2.0 before token transfers are officially enabled on the network. What new DeFi products are created, their attributes and, most important, their impact on the value of ETH remain to be determined. 

Along with lingering questions over how the markets will react to the launch of Ethereum 2.0, there’s also uncertainty over how the launch will affect the competitive landscape for dapp users and dapp developers in the crypto industry. 

“What does the multi-chain future look like?” asked Stanley, CoinDesk’s managing director of events content. “If Eth 2.0 succeeds, … what does that mean for all these other [smart contract] chains out there? Are they going to go away or just cease to exist? I don’t think that’s the case.”

With the recent popularity around yield farming and liquidity mining on Ethereum, Stanley also questioned what the real incentives are for users holding large amounts of ETH, upwards of $11,000 worth, to stake on Ethereum 2.0 when they could earn “100x returns farming ‘hotdog coin’ or whatever the meme coin of the day is.”

See also: Yearn, YAM and the Rise of Crypto’s ‘Weird DeFi’ Moment

These questions are pertinent to the discussions happening next Wednesday at invest: ethereum economy. Keynote speakers headlining the virtual conference are founder of Ethereum Vitalik Buterin and U.S. Commodity Futures Trading Commission Chairman Heath P. Tarbert. To register for the event, click here. 

CoinDesk Research has recently published an updated report about the launch of Ethereum 2.0, as well as recent developments on the existing Ethereum blockchain. Download it for free on the CoinDesk Research Hub.

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Between BitMEX action, the U.K.’s derivative ban and the new U.S. Department of Justice enforcement framework, regulations are coming for crypto. 

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.

On this week’s Breakdown weekly recap, NLW looks at a cross-section of regulatory news, including:

NLW discusses why these might reflect a new moment in crypto history, what it means for current builders in bitcoin and DeFi, and why recruiting corporate allies like Square will become more important than ever.

This week on The Breakdown:

Monday | Are Central Bank Coins the End of Financial Privacy?

Tuesday | The UK Bans Crypto Derivatives

Wednesday | How Bitcoin Could Become the Reserve Asset for DeFi, Feat. Qiao Wang

Thursday | The Market Reacts to Square’s $50M Bitcoin Buy

Friday | Cathie Wood: Secrets of the World’s Best Innovation Investor

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Cathie Wood bet early on Bitcoin and Tesla, and her ARK Innovation Fund is up 75% in 2020.

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.

Forbes called her “the newest superstar investor,” and it’s not hard to see why. 

Cathie Wood is radically disrupting the way money is allocated. Fighting the rise of passive – what she calls the “greatest misallocation of resources in history” – Wood’s funds are actively managed exchange-traded funds that give investors exposure to public companies in key areas of innovation. 

In this conversation, NLW and Wood discuss:

Find our guest online:

Twitter: @CathieDWood

Web: ark-invest.com

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Reactions from Bitcoin Twitter and beyond as Square puts 1% of its treasury assets into bitcoin.

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.

A special breaking edition of The Breakdown follows the market’s reaction to Square’s surprise $50 million bitcoin investment. 

NLW breaks down the foundations for the investment, including:

He also discusses the market’s reaction, from the (potential) connection to Coinbase’s “apolitical” stance from last week to the notion of Square intentionally setting a framework others can follow. 

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Crypto trader, analyst and operator Qiao Wang looks at bitcoin’s macro resilience and why DeFi is here to stay.

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.

Today on the Brief:

Our main discussion is with trader and entrepreneur Qiao Wang. In this conversation, NLW and Qiao discuss:

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The crypto industry reacts to a big move from the United Kingdom's Financial Conduct Authority.

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.

Today on the Brief:

Our main discussion: The U.K. has banned crypto derivatives. 

Just days after the U.S. announced significant action involving BitMEX, the U.K.’s Financial Conduct Authority has made its own move to stop crypto derivatives. 

In this episode, NLW breaks down what actually happened, and looks at the reactions from the crypto industry including:

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As the European Union gets more serious about a digital euro, most central bank digital currencies intend to remove the anonymity of cash.

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.

Today on the Brief:

Our main discussion: central bank coins and financial privacy. 

The EU recently released a new research paper on a possible digital euro. Like many other official central bank reports, it assumes there is no possibility of an anonymous digital bank currency. NLW dissects arguments from people including JP Koning and CoinCenter’s Jerry Brito on why this shouldn’t be true.

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With final preparations for the launch of Ethereum 2.0 soon to be underway, CoinDesk's Christine Kim spoke to Cayman Nava, technical lead at ChainSafe Systems and Alexey Akhunov, an independent researcher and software developer about the kinks in ETH's evolution that still need to be worked out.

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.co.

The Ethereum blockchain processes about three to four times as many transactions as Bitcoin. It’s still not enough, however, to meet rising user demand for the cryptocurrency and prevent network congestion.  

See also: DeFi Frenzy Drives Ethereum Transaction Fees to All-Time Highs

One of the most highly anticipated fixes to Ethereum’s transaction bottleneck and its lack of scalability is an ambitious software upgrade called Ethereum 2.0. According to Vitalik Buterin, the creator of Ethereum, Ethereum 2.0 will boost network speeds from around 15 transactions per second (TPS) to 100,000 TPS.  

How? The solution is sharding. Cayman Nava, technical lead at ChainSafe Systems, explains sharding as “a natural way to break things up.” 

“If you’re wanting to process a lot of data but you don’t want any one party to be overloaded with that data, you can naturally think of breaking up your problem into smaller pieces,” said Nava. These “smaller pieces” Nava is referring to are called shards. In Ethereum 2.0, 64 shards will be created to break up the transaction load of Ethereum. 

See also: Ethereum 2.0: How It Works and Why It Matters

While sharding sounds effective in theory, there are other Ethereum developers who are skeptical about the benefits of this technique in practice. 

“If I were to design scaling [for Ethereum], first I would squeeze as much as possible out of Ethereum 1, which I think hasn’t been done yet, and then after that I would actually introduce sharding logically in order to see whether users would actually be able to use [sharding] effectively,” said Alexey Akhunov, an independent researcher and software developer for Ethereum that has been contributing code to the network’s development since 2016. 

Sharding logically refers to breaking up data within the same blockchain as opposed to sharding physically, which necessitates the creation of multiple mini-blockchains. As mentioned, Ethereum 2.0 will spawn a physically sharded system of 64 linked databases. Optimizing the communication between shards in this environment, Akhunov goes on to explain, may pose an even greater challenge to network scalability than a transaction bottleneck.  

Nava agrees there are kinks and holes in the design of Ethereum 2.0 and its sharded system that need to be worked out. But in Nava’s view, these problems that call for further detailing and research can be delayed in the short term while developers work toward an upgrade launch. 

“I think we can delay these harder problems like how sharding should work or what it should look like. That can be pushed off a little bit so we can think about it and get it right. In the near term, we can get a lot of the benefits from the [Ethereum 2.0] work that we’ve been doing,” said Nava. 

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A reading of a new piece from the Wall Street Journal that NLW argues shows a shifting mainstream narrative.

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.co.

Today’s Long Reads Sunday selection is “How To Avoid Paying the Cruelest Tax: Inflation” from the Wall Street Journal.

NLW argues the piece reflects a changing conversation in mainstream financial circles about the possibility of inflation on the other side of new Federal Reserve policy. 

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A monthly recap featuring conversations with Luke Gromen, Raoul Pal, Tavi Costa, Sven Henrich, Corey Hoffstein and Michael Saylor.

This episode is sponsored by Crypto.com, Nexo.io and Elliptic.co.

A recap of September, which NLW calls a transitional month between the post-lockdown excitement of the summer and the growing macro insecurity around second wave fears and election volatility. 

Featuring some of the most interesting insights from our guests, including:

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