Ethereum 2.0 is coming soon. Well, at least the first phase of it is coming soon. So the upcoming upgrade of Ethereum is a bigger process consisting of different phases. This is going to be massive for the Ethereum universe. Here is everything you need to know about the upcoming Ethereum upgrade.
What Is Etherum 2.0?
Ethereum 2.0 is an upgrade to the Ethereum network planned for a long time. It is going to be the biggest upgrade ever to happen on the blockchain. This upgrade shall give Ethereum the scalability and the security it needs to become adaptable for the masses in the long term. The first stage of the Ethereum 2.0 upgrade is called Phase 0, which is planned to launch by the end of the year.
Ethereum 2.0 will reduce energy consumption, which allows the network to process more transactions. The upgrade will also increase security.
Technically speaking, Ethereum will become a proof-of-stake blockchain (PoS) and introduce so-called shard chains. This means that Ethereum will move away from its currently insufficient proof-of-work blockchain (PoW). This is a really huge change to how Ethereum is working right now and it should bring equally huge benefits. Basically, Ethereum 2.0 is only a change to Ethereum's infrastructure.
This change from a PoW to a PoS blockchain will come along with staking rewards for Ethereum holders.
Right now, the Ethereum blockchain is able to process 30 transactions per second. After the upgrade, the number of processed transactions per second is going to increase by up to 100,000 transactions per second. This is a huge increase in the scalability of the network.
If you're already an Ethereum holder (like most of us here on Publish0x), a dApp user, or a dApp developer, you don't need to do anything. Ethereum 2.0 will be fully compatible with the main Ethereum network that is used today.
So, let`s have a look at the different phases of the upgrade.
Where Are We Now?
Right now, we are in the test-net-phase for Phase 0. This means that teams are testing it right now as they are looking for bugs and ways of optimization. Fingers are crossed that the test-net-phase is doing well.
If everything is going well in this current phase, we will see the launch of Phase 0 by the end of the year, possibly already in November.
In Phase 0, the so-called beacon chain will be launched. The beacon chain's main role in Ethereum 2.0 is to make sure that all the shards have the most up-to-date data.
However, Ethereum 2.0 won't be fully operational right away. This is because there won't be any shard chains at that point, so there'll be no data to keep in sync other than itself.
At first, the beacon chain will be responsible for registering validators and coordinating the amount of staked Ethereum. This means that once the beacon chain is live, everyone will be able to stake Ethereum. However, please keep in mind that staking in Phase 0 will be a one-way transaction. You won't be able to withdraw your Ethereum until the chain will become a shard of Ethereum 2.0 in Phase 1.5. The reason for this is that staking in Phase 0 will be handled by a smart contract on the current Ethereum mainnet.
In 2021, we can expect the rollout of Phase 1. In this phase, the so-called shard chains are going to be implemented. Shard chains are chains that are delegated a portion of Ethereum's transactions and account data.
These shard chains will be proof-of-stake chains, that will enable validators, who have staked Ethereum, to create blocks.
in Phase 1.5, the mainnet will officially become a shard and transition to proof-of-stake. Until then, Ethereum will continue as a proof-of-work blockchain. Transactions will continue to be processed by miners.
For end-users and dApps, this change should be seamless.
Phase 2 is going to be the final phase. In the end, shards should be fully functional chains. Shards will also be compatible with smart contracts and they will be communicating with each other more freely. It is also planned that developers are able to design shards on their own.
My Final Conclusion
Even with the current high transaction fees on the Ethereum blockchain, the market continues to choose Ethereum. Ethereum remains beside Bitcoin one of my biggest crypto holdings.
With the launch of Phase 0, hopefully in November, we can expect a lot of hype around Ethereum. While also looking at similar projects like Polkadot, Elrond, and Cosmos, I believe that 2021 is going to be a successful year for Ethereum.
I am definitely ready for Ethereum staking! What about you?
I hope I could provide you with some interesting and useful information about the upcoming Ethereum 2.0 upgrade.
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