Are you waiting with bated breath for the launch of Ethereum 2.0? Well, you are not alone. According to the official Ethereum website, its developers are working tirelessly around the clock to accelerate the merge; it seems that their efforts will bear fruit soon than we all expect. Instead of being released next year, Ethereum could be released later in 2021! Are we all excited about this upgrade?
Impetus for this Upgrade
But let's hold our horses first and find out why there was a need for Ethereum to be upgraded to be Ethereum 2.0 in the first place. For one, a bugbear of Ethereum has always been the fact that it is a proof-of-work protocol, which is not exactly known for fast transactions and wallet-friendly gas fees. In fact, this area of improvement for Ethereum might be one of the reasons why Cardano has risen in popularity in recent times. Unlike Ethereum, Cardano harness a proof-of-stake protocol, which is said to be more environmentally friendly as it speeds up transactions, thereby reducing the amount of gas involved. This leads to the reduction in gas fees too. Thankfully, Ethereum 2.0 will run on a proof-of-stake protocol, so this is an improvement we Ethereum fans can feel proud of!
Indeed, proof-of-stake has already been introduced to Ethereum through the Beacon Chain at the end of 2020. Known as Phase 0 on Ethereum's technical roadmap, it employs a process called staking, which empowers users to process ETH transactions and create new blocks in the chain as validators, not miners (which is how the original Ethereum functions on). By being a validator, you help to secure the Beacon Chain and make it more robust and immune to attack. Ever heard of how a hacker boldly stole $55 million of ether in an elaborate heist in 2016? Well, with Ethereum 2.0 utilizing staking, this will help reduce the risks of such hacks from occurring in the future.
Brand New Features
Hence, Ethereum 2.0 involves plugging the original Ethereum (known as the execution chain) into the Beacon Chain (also known as the consensus chain). This will enable staking for the entire work and remove away the need for energy-intensive mining. This process is affectionately known as the merge. What is heartening about the merge is that it promises to be a largely seamless transition, so users and developers won't have to cope with a jerky transition after the merge.
After the merge, an invigorating new feature called shard chains will be introduced. Aimed to expand Ethereum's capacity to process transactions and store data, sharding creates 64 new chains on the Ethereum network. Hence, the massive amount of data currently stored on the digital devices connected to the blockchain (known as nodes) could be spread out over these new chains so that less data is being stored on any one device. Increasing the number of nodes helps to relieve pressure on the entire system as well as increases the challenge for hackers to hack into the blockchain as the network is more decentralized than ever before. Surely, we don't want a repeat of the 2016 heist, do we?
My Views on Ethereum 2.0
Ethereum might have occupied the second position in most investors' list of top ten cryptocurrencies to watch out for, so it's heartening that Vitalik Buterin and his team of developers are not resting on their laurels. Instead, they zero in on how the execution chain is increasingly burdened with gigantic amounts of transactions, and proactively improve its competencies so that it is better and more scalable. I liken this to the process of insects moulting several times as they grow, shedding their own skin in exchange for a new one so that they adapt better to the demands of their natural environment. I am glad that they are doing something to address this proof-of-work limitation, which is a common criticism of Ethereum.
The crypto space is growing to be more competitive, with many cryptocurrencies looking to serve the needs of the unbanked and empower them with digital identities. With the inclination towards decentralized governance and proof of humanity, I am thrilled to see how Ethereum's shard chains will help benefit users in the foreseeable future.