Take a look at the detailed information about Ethereum 2.0.
Ethereum 2.0 will make the network scalable, secure and sustainable. Ethereum 2.0 is a series of upgrades currently underway on the Ethereum blockchain. These upgrades have actually been in development since 2014 and represent a major transition for the world's second most popular cryptocurrency. Let's take a look at what Ethereum 2.0 is and when updates can be released.
Current network status
For those who are completely new to the world of cryptocurrencies and blockchain, Ethereum is a decentralized network powered by digital ledger blockchain technology that can be used to execute digital payments. It differs from Bitcoin in that code can be created and programmed on Ethereum's blockchain network, creating smart contracts and decentralized applications that cannot be manipulated or controlled by third parties.
Ethereum 2.0 upgrades will attempt to greatly improve this network. As Ether and Ethereum grew in popularity, too much congestion occurred on the Ethereum network. It can currently handle between 15 and 45 transactions per second, which sounds impressive, but not enough to handle all users of Ethereum from all over the world. As such, transaction fees increase at the same rate.
The biggest feature of Ethereum 2.0 is to make the network more scalable. Thus, it will be able to respond faster to all transactions on the network. Currently, Ethereum, like many other blockchain networks, is powered by nodes, which are any device connected to the blockchain, including servers, computers, and mobile phones. Nodes are interconnected and constantly exchange data to keep the network up to date. However, the nodes on the Ethereum network currently generate a lot of volumes, and the programmers working on the upgrade consider it impractical to grow the nodes.
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Ethereum 2.0
To distribute some of the pressure and volume, developers are turning to a concept called sharding, which will create 64 new chains on the Ethereum network. This will essentially take the large amount of data currently stored in Ethereum nodes and break it up into smaller batches to be stored in more databases. This will relieve the pressure on the existing system and allow more transactions per second. The separation part of the process is very important and will also make the network more secure and sustainable. Sharding will eventually enable ordinary users to run Ethereum on a personal device, increasing network participants and making the Ethereum blockchain more decentralized as there will be more users. More users and more nodes will be a bit more difficult to hijack as it will become more complex for hackers to take over a large part of the network.
To distribute some of the pressure and volume, developers are turning to a concept called sharding, which will create 64 new chains on the Ethereum network. This will essentially take the large amount of data currently stored in Ethereum nodes and break it up into smaller batches to be stored in more databases. This will relieve the pressure on the existing system and allow more transactions per second. The separation part of the process is very important and will also make the network more secure and sustainable. Sharding will eventually enable ordinary users to run Ethereum on a personal device, increasing network participants and making the Ethereum blockchain more decentralized as there will be more users. More users and more nodes will be a bit more difficult to hijack as it will become more complex for hackers to take over a large part of the network.
Finally, with all these upgrades in place, Ethereum will be able to implement a broad smart contract execution. Smart contracts are programmed and automated contracts that cannot be retroactively modified and are executed without needing to be executed by some type of third party. For example, a smart contract can be set up between a landlord and a tenant, which allows the signing of a contract and then the money from the tenant to reach the landlord automatically every month without the usual trouble with these relationships.
What is the Difference Between Ethereum 1.0 and Ethereum 2.0?
With the current technology found in Ethereum 1.0, the system relies on the computing power of miners and a similar “Proof-of-Work” consensus mechanism to validate blocks and secure the network. Migrating to PoS over PoW Ethereum improves scalability, security, and overall efficiency. Instead of relying on miners like PoW Ethereum, the new PoS Ethereum uses validators and Ether deposits, the name of the ETH token that powers the Ethereum blockchain.
The added shard-chain mechanism increases throughput on Ethereum, a much needed improvement due to the demand in the popularity of decentralized finance (DeFi). In theory, shard chains can increase transaction speeds by effectively dividing the data processing mechanism among many nodes. This allows many operations to be performed simultaneously. Ethereum Foundation think tank ConSenSys compares each track chain by adding a new 'lane' to the 'highway'. The more “lanes”, the higher the throughput and the more scalability the Ethereum mainnet can achieve. The shard chains are not available as part of Phase 0, but will be included in Phase 1 according to the roadmap.
Development stages!
Although it has been in research and development since 2014, Ethereum 2.0 is making progress at certain times. In December 2020, Beacon Chain went live, promoting the concept of staking. However, Chain of Signs was not really usable until other parts of the transition became live - hence the term "phase 0" of the plan.
The next step is to combine the Beacon Chain with the existing Ethereum blockchain network, known as the mainnet. When this happens, mining of Ethereum tokens will officially cease and staking will be the main way to generate new tokens. This is expected to happen in 2021, but could take until 2022. When this happens, Beacon Chain will have full functionality.
The final part of the transition, which is expected to occur in multiple stages, is the addition of additional chains to the Ethereum network to give more capacity to process all demand and increase transactions per second. This is expected to happen in 2022, but it is currently unknown when. The launch of Beacon Chain represents a significant milestone and Ethereum developers seem motivated and on track to complete the full transition, but it's a long way off and there is still a lot of uncertainty about timing
Is it worth the wait?
If executed properly, Ethereum 2.0 could be a complete game changer. It will create a network that can potentially process 100,000 transactions per second. It will also create a much more sustainable network without energy-intensive mining, increasing the real-world utility of Ethereum, offering smart contracts to the wider world.
Existing Ethereums will be allowed to switch with parities such as BETH/ETH or directly at 1:1 with the start of trading. After the planning and roadmap explanations, we will share detailed information as an update.