What is new in Ethereum 2.0?

The latest upgrade resulted in Ethereum 2.0 testnet. Each phase preceding the launch of the testnet has promised to improve the functionality and efficiency of the Ethereum in various ways.

Ethereum 2.0 Changes

The two main improvements that are introduced by Ethereum 2.0 and which did not exist in Ethereum 1.0:

• Proof of Stake

• Sharding

Proof of Stake (PoS)

PoS is what is referred to as a validation algorithm by proof of participation: Ethereum 1.0 works on a consensus system known as Proof of Work (PoW). PoW requires miners computing power to construct blocks on the blockchain. The PoS is an improvement that improves security, scalability and energy efficiency. PoS depends on validators and ether deposits to verify transactions on the ETH 2.0 blockchain, instead of relying on miners.

Sharding

Sharding is a method of partitioning databases. The benefit of this approach is that it permits the resizing of the Ethereum blockchain. This approach also allows for a larger number of transactions to be processed per second.

A blockchain implementing this approach then enables the individual in charge to be identified, i.e. the position of accountability of the parties involved to be identified. It is the obligation each fragment would have, primarily ensuring the transactions are validated.

What are the benefits?

These are fundamental changes from Eth 1.0 to Eth 2.0. What are the anticipated benefits?

• Improved performance (and hopefully a reduction in gas fees)

• Environmentally friendly approach to “mining”

• Increased security

• Improved scalability of the network

• Increased privacy

• Staking as passive income

Exciting times ahead for Ethereum 2.0 and the market seems to agree as well with the increasing price action in Eth price over the past week.

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