Why Coin Burn Is Important In Tokenomics

The coin burn in cryptoeconomics, is a mechanism that reduces the total supply of tokens or coins. It forms a part of the tokenomic policies of a cryptocurrency. This is for preventing inflation in the ecosystem as a reasonable means to prevent the over supply of the tokens in circulation. It is much more common among coins or tokens that have a high circulating supply or no fixed supply. The amount of tokens in circulation is generally speaking, the total amount that is available to the public. The supply increases as a result of consensus activity that mints or mines more coins or generates new tokens.

There are 3 main reasons for a coin burn.

  1. Minimizing inflation

The traditional non crypto-economic model allows centralized monetary authorities to regulate and control the supply of money. They can increase the money supply during times of low liquidity in order to boost the market. However, more money leads to inflation and that can affect the cost of goods and services as prices increase. More supply leads to more spending power, and thus that increases demand for public consumption. As a result, prices go up.

We have what is called the inflation rate that determines the price or value of any commodity or asset in the market. The problem with inflation is that it leads to ever increasing prices as simplified in this formula:

V = Inflated Value Of Asset
a = Current Value of Asset

r = Annual Rate of Inflation

t = Time period

V = a(1 + r) t

Thus an asset’s value increases over time as a result of a positive (+) inflation rate, which means its value was not determined by market forces but by a central authority. Interest rates tend to rise with inflation. It is a way the central bank encourages people to  increase savings. Now this is a truly centralized approach that becomes a balancing act for the economy. Cryptocurreny will try not to have an inflationary model which is the primary purpose of the coin burn. With this model it gives more value for the holder and prices never drastically increase due to a central authority. Instead it follows a decentralized and market driven approach to keep the supply in check.

  1. Fair token distribution

The fairness in token distribution is that the platform does not keep more supply than what should be sustainable for the ecosystem. The community is given the right to vote for a coin burn when it is announced on network during the process of digital governance. This allows token holders to decide whether it is in their community’s best interest. This uses a form of governance token that allow holders to cast their vote. Majority consensus will always win in the ecosystem.

The system can be effective in maintaining the price and rewarding loyal token holders. Thus the distribution of tokens is not manipulated by a single authority that decides over the rest of the token holders. When the decision goes to a vote, it benefits the greater community.

  1. Incentive to holders

The coin burn incentivizes token holders by increasing its value. Let’s say we have the following scenario of a digital asset Y:

Total Supply = 100,000,000
Circulating Supply = 100,000,000

Market Cap = 1,000,000
Price of Y = 0.01

Assuming a user has 10,000 coins, they are valued at 10,000(0.010) = 100.

A coin burn takes place to reduce the circulating supply by 40,000,000.

Total Supply = 100,000,000
Circulating Supply = 60,000,000

Market Cap = 1,000,000
Price of Y = 0.0167

It cuts the circulating supply by 40%. This then changes the price of Y. Assuming a user has 10,000 coins, they are now valued at 10,000(0.0167) = 166.67. This is what creates what is called digital scarcity so that the value increases over time. The value this creates rewards the community for holding the tokens and encourages their participation.

Some networks have to do a balancing act on their token supply if they consider a coin burn. Tron (TRX) has issued their coin burn on what they call Independence Day. The project burned 1 billion TRX after switching over from the Ethereum mainnet to their own mainnet. This also burned the ERC20 tokens that were issued during Tron’s ICO. This was meant to control inflation of the TRX token itself, but increases its value in terms of fiat. Other projects that mint tokens back into circulating supply will have to coordinate coin burns to check their inflation (i.e. anti-inflationary measures). Overall, it should be consensus driven by the community and cannot be decided by the developers or majority token holders alone.

The Lightning Network – A Micropayments Layer For Bitcoin Transactions

Scalability is one of the main criticisms against Bitcoin (BTC), since the network is not capable of more than 7 TPS (Transactions Per Second). This is due to the “Scalability Trilemma” of blockchains, in which there is a tradeoff of scalability with security and decentralization. You cannot have all three things at once so it requires a balance of resources. If you value more decentralization, you will get more security as well but that will be at the expense of scalability. The blockchain cannot scale if there are too many nodes on the network. When compared to the VISA and Mastercard network, Bitcoin is not on the same level when processing transactions. The VISA network can process over 1,700 TPS or close to 150 million transations per day. In reality though, it doesn’t always reach these values but it gives some idea of the scale VISA is capable of.

While the developer community looks to the fundamentals of Bitcoin as its strength, others view ways to preserve the core architecture while introducing new features to enhance it. One way to improve scaling is through a Layer 2 solution called the Lightning Network (LN). This protocol moves the computational process from the blockchain main network to an off-chain layer. This puts less work on the nodes while using an off-chain layer as the solution to process direct peer-to-peer transactions using payment channels. The blockchain will then be used for settling the transaction and recording it. These can also be implemented as sidechains, which still have a Merkle Root for provability that they are a part of the blockchain. In theory the LN can process up to 1 million TPS and support other cryptocurrency (e.g. Litecoin).

One of the main talking points of the Lighting Network is reducing transaction fees. This means instant payments that only require a fraction as fees. The idea is to enable micropayments using BTC and make it much easier to pay for items like a cup of coffee. Prior to that, paying for coffee with BTC was impossible. Merchants do not accept BTC and the transaction fees were quite expensive. It made more sense to use BTC to move millions of dollars of currency than to transact $5.00 for a cup of coffee. Developers also promote the idea of using the Lightning Network for Atomic Swaps, which allow large amounts of BTC to be exchanged for other currency or cryptocurrency.

The LN has been in development since 2016. One of the requirements needed to support it was the activation of SegWit BIP 141 UASF. SegWit was activated on August 24, 2017 after the Bitcoin community agreed on BIP 91 (signals the support to activate BIP 141). While it has been steadily improving for production use, it is not without critics. The Bitcoin Cash community hard forked from Bitcoin because one of the reasons was that they did not support SegWit and the LN. The Bitcoin Cash supporters believe in larger block sizes and on-chain solutions as opposed to maintaining existing block size and off-chain solutions. Other critics have expressed concerns that the LN could become centralized with payment channels. Several channels could form one large channel and monopolize the network, in theory. Other views state that the channels could become like intermediaries, with the power to deny transactions and thus defeats the purpose of a decentralized system.

There are 3 possible problems with the LN (from Investopedia):

  1. Transaction Fees
  2. Nodes are susceptible to hacking
  3. Does not solve network effect in Bitcoin

Users will choose whichever has smaller transaction fees. If the main network has lower fees, then there is no need for a Layer 2 solution. However, if the main network is slower then it makes an off-chain solution ideal. A faster LN can process transactions faster and more efficiently than the main network. Fees should eventually lower when there are more users.

Since LN nodes have to be online at all times, if a hacker knows the LN node’s IP address and network, they can attempt to attack it. They can attack the node to disrupt its service or even to try to steal BTC. When a node goes off-line, by accident or intentionally, it can also affect transactions. A Fraudulent Channel Close can occur if a channel closes before the transaction completes and pocket the BTC. Network outages can also bring the LN system down if the payment channels are too centralized.

While the LN is aimed to increase adoption of BTC as a form of payment (i.e. medium of exchange), it may not be able to keep up with the network effect. Bitcoin Cash claims to have solved the problem with micropayments since it has a faster network than Bitcoin. In order for LN to be more successful it must be used for making BTC payments. It appears though that more people are willing to hold on to BTC as a store of value rather than for making payments.

Whether LN will become an integral part of Bitcoin, is still up for debate. It presents an excellent idea but it may already be outdated. More Bitcoin maximalists are really just looking at BTC as a digital asset counterpart to gold, so it is a new store of value. As BTC becomes more valuable, people will not likely spend it for micropayment transactions. This is where the altcoins fit the bill for that purpose. Instead BTC will be like digital gold, stored safely by HODlers in their hardware wallets. This creates a dilemma for the LN, but it can still work out for the best. BTC can be divided into smaller denominations or units called Satoshis. The LN can prove its value by providing a safe and easy way to make micropayments using Satoshis. Proving its value will make it a better proposition for developers to incorporate the LN in their applications, and that could onboard users for greater adoption.

DeFi Open Lending Protocols, Bringing Financial Inclusion To Everyone

When it comes to the significance of the blockchain, most would think about its decentralized organization which is not controlled by anyone and it is open to all. When applied to finance you could come up with a “killer app” for DeFi (Decentralized Finance). The implementations of DeFi are providing ways to offer traditional financial services like lending using the techniques from blockchain architectures. It cuts out the intermediary and lets anyone become their own financial service provider.

This is made possible using smart contracts that run on top of the Ethereum public network. This is yet the best implementation of Blockchain 2.0 with the innovations that introduce Blockchain 3.0 features (e.g. staking, digital governance). The blockchain provides a layer of trust between two parties, so that transactions are transparent. There is also no arbiter or middle man who can obscure details from a transaction. Everything is executed by the smart contract, containing the business logic and conditions.

This has led to the Open Lending protocols, providing ways for anyone to make money from interest lent out. It is based on cryptocurrency and other digital assets, which can be collateralized debt to gain credit. There are no background checks or personal information needed, just a form of collateral to secure a loan. This would be considered risky in the traditional finance sense, but an over collateralized debt position can mitigate risk along with conditions that will allow lenders to leverage digital assets to their advantage. Thus, if a lendee defaults on their loan, the lender will become the owner of the collateralized digital asset.

While most lenders need to be registered as a financial service provider due to compliance with regulators, that is not the case with DeFi products. Open Lending provides an API for DApp developers to create an interface that allows them to interact with a smart contract. The smart contract is created by the lender, who enters into the transaction based on a condition that is specified in the business logic’s code. There is no need for credit checks, employer endorsement or references to secure a loan. It is all based on trust in the blockchain, through the smart contract.

Open Lending can help a large sector of the underserved members of the community, particularly the unbanked. It provides everyone a path to capital resources they would otherwise never have a chance to obtain. People who don’t have access to micro-loans because of lack of documentation will have the opportunity for financial inclusion perhaps for the first time in their lives. People with poor credit scores will get a chance to access financial services they otherwise would not be able to enroll in with traditional banks. Since these protocols run over the Internet, anyone from around the world can be a lender for anybody that needs financing through digital assets. The money can be converted into a stablecoin to avoid the volatility of the cryptocurrency market, but most will just convert to fiat through digital exchanges. At times, the smart contract may also be a DeX (Decentralized Exchange) and allow the person to get their loan in their currency of choice.

The ecosystems for DeFi applications using Open Lending protocols can be a problem for first time users. They are not easily available, and requires some understanding of how cryptocurrency works. Developers are working to make the UI/UX easier and more convenient for users by integrating the DApp with smartphones or mobile devices. It will be hard to regulate this since it is not a particular company offering the services and the smart contracts are merely running on top of an open source platform. It would be hard for regulators to shutdown the Ethereum network since it is not a single entity, but rather a set of nodes that encompass the world. As DeFi becomes more mature, so will the applications. Then more users can enter the ecosystem and realize there is an alternative to banks and creditors when it comes to financial services.

Privacy Coins – Protecting Your Right To How You Spend Your Money

If you were given a bag of cryptocurrency assets, what would it include?

Many would probably say coins that have the ability to cut the middle man out and use direct peer-to-peer (P2P) payments. That is the main point, but there is another one that is just as important … PRIVACY.

The right to spend your money the way you choose without being asked questions. How you spend your money is your right, and no one can decide what you can and cannot use it for. This is not to encourage illicit activity, which is usually the message regulators get. Instead it is about protecting a citizen’s right to privacy. Why should anyone track what a person buys? Should the government know who you donate your money to? If for example the current administration in your country is against the political ideology of the person you donate money to, they could use that information to cut you off. Another example which many would want to consider private is the purchase of adult content. Now there is a legitimate reason to go after criminal activities, but for non-illegal transactions that deserve the right to be anonymous should be allowed.

The type of cryptocurrency that should be in that bag of assets should include Privacy Coins. These provide a layer of protection for users to confidentiality and anonymity in their transactions. Someone can use these tokens to spend their money on things that they would otherwise be embarrassed to disclose. I won’t get into details, but people should be able to use digital payment systems that are like cash in the real world. It is what financial freedom should be all about.

When you use cash, it is a final transaction. There is no ledger that tracks what you spent your money on. It is the most anonymous and private way to transact. This is not how it is like with digital electronic payments today, even with most cryptocurrency like Bitcoin. Visa and Mastercard, both debit and credit, keep records of your transactions in a database. This is necessary for accounting, but it also reveals what you spent your money on. Bitcoin is not fully anonymous, it is pseudonymous. It is still possible to track a person down to the digital exchange where they convert BTC for fiat currency. Bitcoin provides plenty of transparency, and that is important for certain transactions.

Privacy Coins can provide anonymity using techniques that obfuscate transactions. They can also hide the user’s identity in a transaction. This is referred to as a double blind, in which the system does not know what you spent your money on and anyone outside the system as well. Only you and the other party you dealt with will have knowledge of the transaction. It can also be triple blind, in which case no one will know your identity, even the person you transacted with. Only you know about the transaction. This does pose a problem to regulators who want to be able to track down transactions or the movement of money. This is to check for AML (Anti-Money Laundering) purposes for financial rules and regulations in the banking and finance industry.

This is not to say that everyone will use Privacy Coins for purposes of laundering money, but the question is why do those laws exist in the first place? They are jurisdiction mandated to control the flow of money outside of the country. It is in fact necessary to keep track of the flow of money to prevent funding of terrorism and illegal financing. Privacy Coins can circumvent these laws, so it is not popular with regulators.

Monero (XMR), Dash (DASH) and ZCash (ZeC) are three of the top Privacy Coins. Each one has its main feature that provides privacy for its users. Monero provides untraceable source and destination of transactions using the CryptoNight PoW protocol. Dash uses PrivateSend, which mixes up data in a transaction to hide it from prying eyes. ZCash uses its Zero Knowledge Proof technique called Zk-SNARKS (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge) which does not reveal the information in a transaction.

Privacy features are also being incorporated into other blockchain projects using cryptocurrency. It is becoming an important consideration despite the legal hurdles they could face. Privacy focused projects have significance when it comes to protecting identity and anonymity in transactions. Whether or not that is allowed is a subjective question depending on which perspective you are looking at it from. For the individual citizen it is a right to be able to choose how you spend your money, and Privacy Coins offer a way to do so without being tracked.

For regulators, it is not a good look because of the potential to provide criminals with a way to hide their illicit activities. This will certainly not be allowed in restrictive governments that are highly centralized, but it could find some leeway in less restrictive governments. In the US constitution there is an amendment that guarantees privacy, but under the rule of law:

“No State shall… deprive any person of life, liberty, or property,
without due process of law.”
– Liberty Clause of the 14th Amendment

As technology evolves, so to will the interpretation of due process since there is no specific law that guarantees the right to an individual’s privacy with their money. The best way to do this is for regulators to come up with a list of what are transactions that can be permitted for privacy (e.g. novelty items, direct P2P sales, etc.) and which ones certainly need to be regulated (e.g. cross border money transfers). Ultimately it will be decided by the courts. Banning them however will not be easy due to their decentralized nature, and that could be what keep Privacy Coins alive.

Nodes, Masternodes and Supernodes

I am going to explain the purpose of nodes in the context of the blockchain and digital governance. Nodes are basically an instance of a device that participates in the consensus on a blockchain. Nodes behave according to protocols that determine the exchange of data and functions that contribute to the operations of the network. The nodes also form the digital governance within a blockchain ecosystem to enable policies and rules that serve the interest of the majority. There are three types of nodes to describe, the basic node, masternode and supernode. These are concepts that feature in Third Generation blockchains which aim to bring more efficiency to maintain its operations.

A blockchain can have its own system of government or governance. This is the concept behind digital governance, in which nodes participate in voting to elect delegates who can then become masternodes or supernodes, which we shall explain. In order for a fair system to exist, it must revolve around a token and protocol which can be built in code for a network. The token is used to count as a vote. When voting for a masternode or supernode, voters (which can be any type of node) who have more tokens that are frozen or held, have more votes that are counted. Therefore those nodes that get the most votes become masternodes or supernodes. Each blockchain has its own type of governance with consensus (e.g. EOS, Tron, NEO, Cardano).

A basic node can be any device that performs a function to help verify transactions and validate blocks. This activity is the consensus feedback mechanism algorithms that secures and validates a blockchain. Nodes can either mine (Proof-of-Work) by contributing raw computing power as their resource or they can stake (Proof-of-Stake) by holding funds which is used to provide a proof of how much validating power they own. When a node mines, they must compete with other nodes to solve a cryptographic puzzle and discover its value called the nonce. This is a compute intensive process that requires massive computations that require hash power measured in hash rate (measured in hashes per second). It expends a lot of energy since the nodes’ compute intensive task consume plenty of electricity. A more efficient method is for nodes to stake. In staking, the node will validate their power on the network by the amount of funds they hold. A node that holds the most funds has the greatest amount of validation power on the network.

Above the node, is the masternode. These are more resource intensive devices that can perform more functions than a typical node. The masternode can be assigned specific tasks that not only participates in consensus, but also involved in network operations. This can be anything from routing to simple payment verification (SPV). Although nodes can perform the same task, it will depend on the network’s protocols and policies. For example, in some networks a node only performs simple tasks like payment processing. The masternodes are then responsible for handling the verification of transactions that are then packaged into blocks for validation.

There is an even more resource intensive device above the masternode, the supernode. The supernode performs the validation of blocks. This requires more computing resources in the network since blocks can contain many transactions, and in volume this will require the most processing power on the network. Supernodes are the like the most powerful servers in the data center. You give them the most work to do and they will be able to handle it. However, in the context of a public blockchain which is trustless and permissionless, there has to be an incentive to do work. Therefore, the supernodes are incentivized by payment in the network’s native token. These are also called rewards, and they are given on many blockchains for their contribution to providing compute resources to the network. Masternodes and nodes are also incentivized for their work, so the ecosystem runs on incentives to process transactions and add them to cryptographically secured blocks.

A hierarchy exists on the network in which supernodes are at the top, followed by masternodes and nodes. While blockchains were designed to be decentralized, there are critics who point to how masternodes and supernodes make the system more centralized. The reason being the issue of scalability. When you concentrate validation of blocks only to a few nodes, it centralizes power. That is actually the purpose for Third Generation blockchains like EOS (which uses dPOS or delegated Proof-of-Stake). A blockchain by design is not inherently scalable, but secure. In order to meet scaling, it must be centralized to a certain extent in order to allow more transactions to be processed (the blockchain trilemma). When you have too many nodes trying to validate a block at the same time, it becomes inefficient when applied to an enterprise type of solution for business. By dedicating certain nodes for validating blocks, it becomes more efficient and faster when processing transactions. This does require supernodes to have a tremendous amount of resources. Becoming a supernode is thus a motivating factor in a blockchain because they collect the most rewards. In blockchains like EOS which call their supernodes as block producers, you need nodes that run in data centers that will be able to process transactions by volume. A simple PC or smartphone will obviously not be allowed to do this because it lacks the computing resources.

Supernodes must still follow the consensus mechanism. In this case, they must stake plenty of funds to prove they have the resources to become a validator. They actually first become a candidate by proving their staked funds. They are the largest holders of the blockchain’s native tokens, so there is a lot they have at stake to become a validator. They can also lose it all if they try to become a bad actor. The protocol could have a consequence which can ban the node and take their staked funds. Once voted as a supernode, that is the only time they can produce blocks on the network to add to the blockchain.

Once there are supernodes on the blockchain, they can begin producing blocks. However, supernodes do not need to compete with each other like in mining to validate a block. They are given a round each for validating blocks. On EOS, there are 21 supernodes or block producers only. Each block producer is given a round for producing 6 blocks with a time of 0.5 sec per block. If we do the math, that is 6.3 minutes per round and a total of 126 blocks produced. The consensus among all producers takes place after a block is produced. They try to maintain a 2/3 rule for validation. It means all it takes is 14 block producers to validate a block following byzantine conditions.

Supernodes have the most at stake, followed by masternodes and then basic nodes. The basic nodes do not have to stake anything if they are just accessing wallets or querying the blockchain. Nodes which do participate, may do so for incentives. Since Supernodes have the most at stake, they also have the most to lose. That is why the protocols encourage incentives so that attacks and spam on the network can be minimized. In a sense, if Supernodes collude they can control the network through a 51% attack. However, if the protocol has built in checks and balances to prevent this, the Supernodes could all be replaced and lose all their staked funds.

Separation of tasks among nodes allows a network to operate more efficiently. Less resource intensive nodes can perform the simplest tasks on the network. More resource intensive tasks require processing power. For a fair system to exist, a token is also used for incentives and digital governance. That provides rewards to nodes for their contribution and participation on the network. It also brings digital democracy to an ecosystem, allowing them to elect the nodes they want to become verifiers and validators on the network. While it is more centralized in nature, it still remains decentralized since there is a digital governance process that is open to all nodes. This limits the power of any node that attempts to control the network. Depending on the protocols and policies of a blockchain, there can be consequences to bad actors who attempt to attack or cheat the network. With this system in place, it encourages honest participation in securing and operating a blockchain.

Did Vitalik Buterin propose Bitcoin Cash As A Scaling Solution to Ethereum?

For those who have been in the cryptocurrency space for a long time now, you know how tribal things are. Schisms like the Bitcoin and Bitcoin Cash hard fork due to ideology is common. There have also been splits due to consensus disagreements like the resulting Ethereum and Ethereum Classic split to the DAO hack. The tribalism in the cryptosphere does not really foster much collaboration, though there are now proposals for inter-blockchain communications. It is going to be inevitable with the thousands of blockchain projects out there. The best way for cryptocurrency to be utilized is through some form of interconnectivity that would allow atomic swaps and quick conversions.

It seems that the development community and token holders don’t exactly approve of other blockchains they don’t support. Recently, Ethereum’s founder Vitalik Buterin proposed a way to use another blockchain to provide a scaling solution to the current Ethereum blockchain. The benefits are an increase in transaction velocity that can deliver faster speeds than the current Ethereum blockchain (currently between 15 and 30 transactions per second). There was plenty of shock and disapproval of Vitalik’s proposal, even among those who work in the Ethereum development community. You can check on Twitter since that is too long to discuss about in this article.

It does sound crazy though coming from the founder of Ethereum. He could have framed it in a way to not make it sound like Ethereum’s blockchain is useless. It sounded like he was saying another blockchain should be used to scale Ethereum. In other words it seemed like he was going to replace Ethereum’s own blockchain. If that were the case, why even use Ethereum? It was taken out of context, I felt. What Vitalik actually meant is that the Ethereum blockchain can use another blockchain to help scale only as a temporary solution. Eventually Ethereum 2.0 will resolve the scaling issue by gradually shifting from PoW to PoS as the consensus mechanism on the network.

What made Vitalik’s statement more unpopular was the proposed blockchain he had mentioned which was Bitcoin Cash. According to Vitalik, the proposal was meant to be a sort of fix for Ethereum until its developers have finished working on Ethereum 2.0. He wrote about this in a post on the Ethereum Research Forum you can read more about from this link. The author is without a doubt Vitalik Buterin himself. Does it really make sense? Let me discuss what the explanation for using Bitcoin Cash was from Vitalik’s own research.

The benefit of using Bitcoin Cash’s blockchain are its larger block size. Larger blocks can hold more transactions and thus the potential to increase the transaction rate per seconds. What Vitalik likes about the Bitcoin Cash blockchain is the higher data throughput it produces at 53.3 KB/sec compared to Ethereum’s 8 KB/sec. According to Vitalik, the Ethereum blockchain will be used as the computation layer while Bitcoin Cash provides the data layer.

Another thing about Bitcoin Cash that Vitalik likes is the lower transaction fees per byte. One reason for using Bitcoin Cash is that it has lower transaction fees since they have larger block sizes to process more transaction volumes. That makes more efficient use of bandwidth since you can process more transaction per unit of time or seconds. At the moment, transaction fees may have stabilized for many cryptocurrency but they can still be high. It would make sense for Ethereum to use a lower transaction fee for their blocks in order to save users on gas.

One problem with Bitcoin Cash though is since it is a fork based on Bitcoin, it requires the same 10 minute block propagation time. This is where the community really criticized Vitalik for proposing Bitcoin Cash. Aside from that, some also pointed out that there are inherent flaws with the Bitcoin Cash blockchain that would make Ethereum susceptible to these vulnerabilities. Vitalik actually suggested that using the Avalanche pre-consensus algorithm could improve block propagation times on the Bitcoin Cash blockchain. With that in place, Vitalik then explains:

“If these techniques become robust for the use case of preventing double-spends, we could piggy back off of them to achieve shorter finality times …..”

It also seems that Vitalik had no problem with the 10 minute block time propagation since Avalanche pre-consensus is complicated to implement.

“Though this technique may be too complex to implement in practice, and we may want to just settle for being okay with 10-minute block times for a full general-purpose VM until eth2 comes out.”

It is true that Vitalik proposed Bitcoin Cash as a temporary solution to Ethereum scaling. Bitcoin Cash is not replacing Ethereum, this was just a proposal to address current limitations in their blockchain. The Ethereum 2.0 blockchain will eventually implement PoS using the Casper protocols and sharding.