Many people are worried about the launch of Ethereum 2.0 because the media describe it as a “tipping point” in the cryptocurrency industry. However, the audience seems to forget that there are real alternatives.

Ethereum 2.0 is taking too long?
There has been a lot of hype around Ethereum 2.0 in recent days. The Beacon Chain Deposit Contract managed to generate enough deposits to start Phase 0 Eth2 in December 2020. This is only phase 1, but full functionality is not expected for the next two years – or possibly longer. Hence, it will take some time before anyone can tell if Ethereum 2.0 can do what it claims.

On the subject: Ethereum 2.0: Less Is More … and More

The launch of Ethereum 2.0 is necessary to keep the network safe from itself. The constant overload of the network and the growth of gas charges have led to its serious limitations. Since the DeFi industry began to gain traction, these problems have become more and more apparent. Finding a permanent solution is imperative, but not always easy or straightforward.

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One of the arguments of Ethereum 2.0 proponents is that there are other layers of scalable solutions to reduce congestion. Groundbreaking ideas, including Loopring, show that things can be done differently. However, these layers are not used broadly and can never be used. This integration may provide short-term relief, but it is far from a long-term solution.

On the subject: Ethereum will be the main benefit for investors in 2021

Ethereum has reached its limits
In terms of design, the current iteration of Ethereum – or Eth1 – is very limited as it is not designed to scale significantly. This is a bit unusual as the project has always been positioned as a haven for developers looking to try blockchain technology. The more applications, projects and services, the more downloads, so users are unhappy.

Given that this network is the main focus of financial innovation, a different approach is warranted. Although Ethereum technology is flexible and standard in some ways, it is also home to bugs, hacks, insecure code, and so on. Additionally, some projects go beyond Ethereum, although the cryptocurrency is much larger than the Ethereum ecosystem itself.

This becomes clear when you look at the current DeFi scene. Hundreds of projects have come and gone, but few remain. The rest of the projects do not offer support across all networks. It’s about meeting the needs of Ethereum users, even if it’s not the most fluid ecosystem.

RELATED: Ethereum 2.0 To Boost DeFi, But Launch Delay May Bring Network Back

Bitcoin could become Defi’s property
Exploring the possibilities of the decentralized finance world by default requires Bitcoin (BTC) support. Unfortunately, this is not the case today. It is true that some DeFi projects support Encapsulated Bitcoin (WBTC). This copy of the Bitcoin token complies with the ERC-20 token standard, which in my opinion is an unnecessary hurdle that shouldn’t be there.

Given the market value of Bitcoin and the dominance of cryptocurrency in general, the current situation is a bit confusing. The lack of support for the first digital currency in its original form is a serious problem. None of the major Defi companies seem to be changing their business model to include Bitcoin. A clear sign of lack of innovation in decentralized finance.

RELATED: DeFi wouldn’t have lasted long if it hadn’t opened up a $ 250 billion bitcoin treasure fund.

DeFi needs bitcoin to survive
While decentralized finance is popular in its current form, it is still a somewhat niche market today. According to DeFi Pulse, the top Ethereum DeFi platforms have a total value of over $ 23 billion locked down. Of that amount, over $ 3 billion comes in the form of WBTC – a clear sign of what investors and speculators will see in the future.

Instead of just focusing on Ethereum, a more accurate strategy would be to study all other major currencies. The approach to supporting cryptocurrencies other than ETH is unusual. There are other DeFi projects out there that like to support Ether and blockchain-issued tokens.

There is nothing wrong with waiting for Ethereum 2.0 to reach its full potential. However, at the moment, no one knows how long it will take. At the same time, there is no need to convert existing assets like bitcoin or XRP into ether, as these assets can be leveraged through cross-chain solutions.

Also, one has to wonder if the Ethereum 2.0 update will actually solve the Ethereum problems. On paper, this seems like a major network upgrade. In fact, not everything is proven and verified by the general public.

Source: CoinTelegraph