It’s On To Phase Two For Ethereum

Ethereum has established itself as one of the most formidable, and ambitious, blockchain projects. Now that the firm has set up its "Layer One", what's next? Joseph Lubin says it's time for "Layer Two" to shine.

Layer Two Ethereum

Ethereum co-founder Joseph Lubin said in a speech delivered July 10 at Hong Kong’s Rise conference that 2018 is the year we see Ethereum’s Layer Two systems mature.

A Vision Of The Future

While in a panel discussion with Village Global’s Erik Torenberg and Arbor Ventures’ Melissa Guzy, Lubin revealed that they are moving into “phase two”, where he claims we will see real scalability.

Lubin explained his vision for Ethereum:

“The infrastructure ‘layer two’ for the blockchain ecosystem would preserve ‘layer one’- an underlying ‘trust layer’ secured by the radical decentralization of the core blockchain. To this first layer, new technologies can be added with various on-, side-, or off- chain mechanisms enabling greater scalability.”

Erik Torenburg agreed, saying 2018 is a year of transition for blockchain, adding that “if 2017 was the year of the ICO, then 2018 is for the building and delivery of products.”

The Ethereum co-founder discussed his wider vision for blockchain, saying he sees blockchain offering a “natively digital world” of interaction in trustless contexts, and he believes this is now set to “ramify in virtually every industry.”

Lubin looks at the blockchain revolution as a step away from “frictional analog contexts” to new, natively digital structures, many of which are starting to transform the future of “money, identity, reputation and legal certificates,” among others.

Let’s Talk Regulation

Joseph Lubin
Joseph Lubin

The panel then moved on to talk about regulation and cryptocurrencies. The panelists compared regulatory laws between the US and Asia, with the panelists, agreeing that America proposed a “more developed differentiation” for regulating cryptocurrencies.

Lubin adds that the stance that U.S. Securities and Exchange Commission (SEC)’s Bill Hinman took regarding crypto. According to Lubin, Hinman recognized that “as distinct from securities – consumer utility tokens may offer a whole new model for delivering services and products to consumers – a networked business model held together by [digital] tokens.”

While he notes that the potential for fraud can be worsened by the global context of ICO’s, and Lubin also states regulators are needed to help clean up the industry, He still holds that self-regulatory initiatives are also crucial for the health of the crypto industry.

The whole panel agrees that crypto-specific regulation will soon be necessary to prevent crackdowns like those seen from China, Japan, and South Korea.

Ethereum is currently the second largest cryptocurrency in the world, with a market capitalization of almost $44.5 billion.

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