# Historical Context

We're now approaching our detailed study of the various elements that make up Eth2. Topics discussed within previous chapters will prove useful throughout the entirety of our exploration. Before we dive into technical content, we should take a moment to prepare ourselves. This chapter takes a look at the history, motivations and philosophies behind Eth2. It additionally describes, briefly, the process by which Eth2 has been developed thus far. Finally, this chapter provides readers with some guidance regarding the structure of, and learning strategies for, content covered in the remainder of this work.

This first section attempts to highlight the various challenges and advancements that served as motivation for the development of Eth2. Fundamental limitations to the scalability of most modern blockchains are clearly significant among other motivators. Systems that scale linearly are unable to satisfy demand at affordable prices without falling into traps of centralization. In the absence of sufficient throughput, blockchains are unlikely to attract the large global audience they target. Existing protocol-level solutions to this problem result in network centralization far out of line with traditional decentralization philosophy. Application-level solutions are throttled by base-layer performance and therefore useful but not sufficient for long-term sustainability.

Proof-of-Work itself provides several challenges for blockchains, like Eth1, that rely on it to achieve consensus. Proof-of-Work consumes physical resources like electricity at eye-watering rates. Estimates place bitcoin's annual electricity consumption and carbon footprint at levels comparable to the entire countries of Austria and Denmark, respectively. Such excessive waste is clearly damaging to the planet's ecosystem and is not likely to thrive in the current global political environment. Constant hardware upgrades demanded by Proof-of-Work, wasteful themselves, increase the entry cost for new consensus participants. Proposals that attempt to modify a chain's Proof-of-Work algorithm, as to influence the type of hardware necessary for participation, cause seemingly community debate. A shift away from Proof-of-Work is clearly well motivated.

Core hurdles in scalability and consensus did not go unnoticed by the designers behind Eth1. Many of the aforementioned dilemmas and their impacts on sustainability were explicitly factored into the Eth1 protocol. Vitalik Buterin has noted that limits to throughput were acknowledged from the project's outset. Buterin and others described serious alternatives to Proof-of-Work for Ethereum as early as 2014, more than a year before the system's initial launch date. These considerations were codified by the inclusion of a "difficulty bomb" designed to gradually decrease network performance over time and thereby incentivize the development of new consensus mechanisms.

Though aware of challenges ahead, the teams that brought Eth1 to fruition can hardly be faulted for their design decisions. Eth1's virtual machine concept was already much more ambitious than earlier blockchain systems. Ethereum's $20m pre-sale cannot be considered insignificant, but pales in comparison to the billions raised by other projects via smart contracts deployed to the platform. Many technical elements of Eth2 simply could not have been constructed without the funding and research enabled by its predecessor. Eth1's strong and vast community of contributors has also without a doubt heavily advanced the state of research in numerous fields of mathematics and computer science. It's only now that Ethereum has become adequately equipped to tackle the various challenges it identified.

Ethereum's community serves as the final motivator we discuss here, though one can likely identify many more. Eth1's growth has quickly outpaced its capacity for interactions on the network. As countless teams begin to turn some attention to long term sustainability, Eth2 research and development efforts have only accelerated. Ethereum's open community structure attracts individuals with a wide of backgrounds and perspectives. Much research on Eth2 is conducted in public over forums like Ethresearch or on large conference calls held on a regular basis. The ethereum community can very reasonably be attributed with tipping the scale that took Eth2 from a vague idea to a near-future reality in only the recent past.


Needs conclusion.