---
title: 2.2 Ethereum 1.0 / Ethereum 2.0 
description: The origins, history, success, and future trajectory of the Ethereum Network
---

# 2.2 Ethereum 1.0 / Ethereum 2.0 (the road to it)

It is only fitting that in our discussions of the L1 landscape we start with the most successful and most renowned L1 ecosystem - namely Ethereum. In this overview we are going to understand the origins, history, success, and future trajectory of the Ethereum Network - as well as some of the larger criticisms and challenges to the L1 that Haseeb likens to the ‘New York’ of crypto. 

As we will do for each L1, here is a fast ‘fact-sheet’ overview of the fundamental design of Ethereum 1.0: 


| | ETH 1.0 |
| --- | --- |
| Block Time | 15s |
| Tx Finality | 3 min |
| TPS | 15 |
| Avg Tx Fee | ~$21 |
| Languages | Solidity |
| Number of Validators | 10k |


What are we looking at when we look at Ethereum? We are looking at the very first smart-contract platform. Essentially the first time a blockchain has been programmed to securely execute and verify application code. Unlike Bitcoin, one is able to use the logic of Ethereum to program decentralized applications on top - in ETH’s native programming language - Solidity. 


![](@site/static/img/bootcamp/mod-em-2.2.1.png)


But as the ‘first of its’ kind’ there has always been questions about the scalability of the design of the Ethereum Network - this specifically has to do with the cost of gas on the network required to pay for transactions. 


![](@site/static/img/bootcamp/mod-em-2.2.2.png)


Why is this the case? To put it simply, Ethereum was not designed to sustain a high throughput of transactions - initially. As we can see above it is capable of processing roughly 15 transactions per second, with an average fee of 21$. Many have asked: Is this how much it should cost to participate in the future of finance? In the open-source crypto-economic systems of the world? This is a glaring issue that we will return to - as a means of discussing potential challenges to ETH and solutions. 

## The DAO Hack

When Ethereum originally launched in 2015 it was not without setbacks. The DAO hack, as it came to be known was a hack of one of the first dApps on ETH, that defined the future of the network and set a precedent on network management: 


![](@site/static/img/bootcamp/mod-em-2.2.3.png)




* [Gemini on the DAO HACK. ](https://www.gemini.com/cryptopedia/the-dao-hack-makerdao#section-origins-of-the-dao)

In short, the Ethereum community decided to fork the original Ethereum chain, so as to restore the stolen funds. This led to the creation of Ethereum and Ethereum Classic. 

The important takeaway from this story, is that despite the programmability of blockchains, they are ultimately governed by the community of participants in the network - and if the community can come to consensus on a specific decision to make - whether that be to fork the chain, mint new tokens, burn tokens, or block certain accounts access - it is in principle possible to do. 

## Understanding the Power of Ethereum

As Ethereum was the first major Layer 1 smart contract platform, they have been home to the most successful dApps, as well as the most value locked on the platform. 


![](@site/static/img/bootcamp/mod-em-2.2.4.png)


They have however been somewhat delayed in the implementation of their roadmap, leading to much discussion about the future of Ethereum. What we are referring to here is what is known as the ‘Merge’ as well as ETH’s sharding and roll-up plan. Our focus on Ethereum is going to be twofold: First, what challenging _scaling_ issues have resulted in, and secondly, the ETH roadmap that may or may not fix these issues. 

## Solidity and the EVM

Solidity is the turing-complete programming language of the Ethereum Network. 

## Scalability Challenges for Ethereum

Scalability as discussed above, refers to the ability for a network to sustain a high-throughput of transactions or activities. Due to the original design of the ETH network, it was not launched to accommodate millions of users in a cost-efficient manner. 

The result is that with high demand, but limited throughput on the network, the cost of gas spikes, making it highly expensive to pay for basic services in the network - gas costs. This made many question the usability of ETH - how can crypto bank the unbanked, and offer new financial and creative services to the world if it costs an average of 21$ to simply have an action on-chain. 

The reaction to the scalability challenges of ETH have been twofold: Loyal Etherians have committed to building scalability solutions connected to the Mother-layer of ETH. Originally this was known as plasma scalability solutions, sidechains, and rollups. Today rollups have been a clear answer, with only one ‘side-chain’ harnessing the narrative (Polygon) which we will speak of after. Let’s zoom in on Roll-ups for a second as you will most likely hear a lot about roll-ups in the future. 

### What is the idea behind roll-ups? 

That a separate protocol can be used to quickly process transactions, and then bundle those transactions into a larger transaction that is processed by the ETH main chain. So in essence, we are outsourcing transaction throughput to other software that is still nevertheless built on the ETH main chain. 

Analogously you can think of roll-ups a bit like skyscrapers - they are ways of managing space such that you can compact a lot of people into an area. Except for crypto, we are not talking about people as much as we are talking about transaction costs. Popular roll-ups today include Arbitrum, Optimism, and Starkware. 

What is the critique of roll-ups? This is known as ‘Death by A million cuts’. 

On the Ethereum main-chain, we have a single platform, in which all dApps are being processed by the same network. 

With rollups we have a separate network, processing transactions more quickly than the main network, and sending bundled confirmations of those transactions to the main network. 

The challenge that ensues is how dApps built on different roll-ups are able to communicate quickly and easily with one another. For example, if I am sending money from one roll-up to another, I need to either use a bridge between the two, or, take my money off of the first roll-up, bring it down to the mother-chain, and then move it up to the next chain. In a similar vein, if I am looking at the infrastructure available for my dApp, the infrastructure provider - call it an Oracle, Storage, On-Ramp, Custodian, must now offer there services to not just Ethereum but also the specific roll-up terminals. This makes it more difficult for money and users to switch between applications. We will learn later on about the composability thesis, and that one of the strongest value propositions from an L1 ecosystem is the ability for value to intermingle composably. This is not possible in the current design of a roll-up centric scalability approach. 

In the word’s of Vitalik:

_“These facts taken together lead to a particular conclusion: the Ethereum ecosystem is likely to be all-in on rollups (plus some plasma and channels) as a scaling strategy for the near and mid-term future.”_

Does this mean Ethereum is doomed? Not at all, it has simply provided inspiration for others, to try to build alternative L1 ecosystems that may rival Ethereum and solve the scalability problem that has congested its network so deeply. This is what we will be focusing on in the following lectures: What other L1 ecosystems exist, and how do these ecosystems represent the ‘state’ of crypto today? 

## The ETH Roadmap Into The Future

Vitalik has written quite openly about plans for scaling the future of the Ethereum network. Most recently he has even outlined the various strategies for Ethereum into the future that we will summarily address now: 


![](@site/static/img/bootcamp/mod-em-2.2.5.png)


While Vitalik has intended this roadmap to be executed in parallel, let’s take them each one at a time: 

**The Merge:** The Merge was a long awaited update for the ETH network that transitioned it away from a proof of work consensus mechanism, and moved it to a proof of stake design. In successfully completing this milestone, Ethereum is no longer energy intensive, and has become net deflationary - as fees from the network are now being burned making issuance deflationary over time. 

**The Surge:** To scale the entire Ethereum Network to 100,000 Transactions per second using rollups, primarily optimistic rollups, and ZK-EVMs. This strategy was outlined in detail by Vitalik in [his blog here, ](https://ethereum-magicians.org/t/a-rollup-centric-ethereum-roadmap/4698)and essentially confirms to everyone that the future of scalability of Ethereum, is largely going to be through different types of roll-ups that progressively improve in their design over time. 

**The Scourge:** “Ensure reliably and credibly neutral transaction inclusion and avoid centralization and other protocol risks from MEV.” The Scourge is all about balancing out risk of centralization in nodes on the Ethereum network, specifically as it relates to algorithms and machines running to optimize block space for DeFi purposes. 

**The Verge:** “Verifying blocks should be super easy - Download N Bytes of data, perform a few basic computations, verify a SNARK and you're done.” The Verge seeks to expand the ease with which anyone can participate as a validator on the network - specifically as ‘Chunk producers’ and ‘Chunk producers using ZK-rollup designs. 

**The Purge:** “Simplify the protocol, eliminate technical debt and limit costs by participating in the network by clearing old history.” The purge has to do with managing and simplifying memory on Ethereum, such that there is an expiration of old transactions, gas mechanics can be simplified, and there is a serialization of transaction types. 

**The Splurge:** “Fix everything else”. Perfecting the EVM and abstracting out accounts. 

Interestingly, the original vision for Ethereum 2.0 was a fully sharded Ethereum main-chain. While this goal seems to have been substituted for Zk-Sync / Optimistic rollup optionality instead, the composability losses of this move remain to be fully understood or discussed. 

## World of Dapps vs. Universe of Chains

The original vision grounding ETH 1.0 is clearly a World of dApps chain - that is to say, Ethereum is supposedly a cloud environment to support the development of a host of decentralized applications - on a single composable platform. However, in light of its scalability issues, it is unclear what kind of a network an Ethereum of the future will look like with multiple isolated roll-ups, that are not natively composable. 

## Summary of Ethereum

Ethereum is the home to DeFi and the original smart contract platform from which NFTs were first launched. It is now a proof of stake blockchain, that is net deflationary - which leaves many with high hopes for its future. That being said, the inability for the main-network to scale, and the delays until reaching ETH 2.0 have made others also look at other L1s for building successful dApps. 

All of that being said, Haseeb has routinely referred to Ethereum as the ‘New York’ of crypto - the legacy city of an emerging country, the largest, the most affluent, and also the most expensive to be a part of. Ethereum remains the home of the largest DeFi applications, NFT Communities, and crypto-natives in all of crypto. It is an extremely successful L1 that appears to possess staying power into the future.