At the Rise conference, which took place in Hong Kong on Tuesday, July 10th, Ethereum’s Joseph Lubin let attendees know that the first layer in the Ethereum ecosystem is completely established. However, they are far from done, because it is time to begin “layer two” systems to allow for maturation and ramification.
The announcement happened during a panel discussion that Lubin contributed to, which also included Erik Torenberg (Village Global) and Melissa Guzy (Arbor Ventures). Lubin said that this is the phase “where we will see real scalability.”
He also noted,
“We're moving into a space where Ethereum can serve as the layer one trust system and built into Ethereum we’ll have hundreds of thousands of transactions in the layer two systems and we’re going to see that ramified this year.”
The second layer’s infrastructure is inherently designed to provide “layer one” with preservation of its various function. Lubin is calling this sequence a “trust layer,” due to the way it is secured with the core blockchain and decentralization. Each new technology that is introduced to Ethereum would exclusively go to the first layer, though the company would manage it for scalability. Then, any function of the technology is also protected by this “layer two” system.
To give a better grasp of this concept, Lubin spoke about another on-chain scaling solution from Ethereum called Plasma. Plasma was brought into the ecosystem in August 2017 by Vitalik Buterin and Joseph Poon. Poon is responsible for developing the Lightning Network, a.k.a. “layer two.”
Torenberg supported Lubin’s thoughts on progression and transition for blockchain this year. He suggested that,
“if 2017 was the year of the [initial coin offering] ICO, then 2018 is for the building and delivery of products.”
Lubin continues to look at the bigger picture of this industry, saying that blockchain provides a, “natively digital world” of interaction, which will help the technology touch other industries as well. Lubin commented that this transition towards virtual is a move away from “frictional analog contexts.” However, they have also made a major impression on the future of crypto, fiat currency, legal certificates, and other industries. However, unlike the start of the internet, blockchain has a “very broad” path available, due to the many applications.
The rest of the panel discussed the different between the way that the United States and Asia are regulating cryptocurrencies in their areas. Every panelist held the same opinion of America’s handling of these issues, saying that they have suggested a “more developed differentiation” in their regulatory measures.
Lubin commented that, by the U.S. recognizing tokens as utilities instead of securities has the potential for,
“a whole new model for delivering services and products to consumers – a networked business model held together by [digital] tokens.”
It is still important to regulate the industry, especially considering the fraud and scams that have taken place in recent months, even with ICOs. Lubin added, “we need regulators to help us clean up the industry.” All of the panelists encouraged the industry to make haste on these regulatory measures, saving them from governmental rollbacks, which is what has happened in China, Japan, and South Korea.
Right now, Ethereum is the second-biggest cryptocurrency in the world.