In 2017, cryptokittes was launched on the Ethereum network; it caused massive congestion issues. The Ethereum blockchain was not able to handle all of the transactions that flooded the network, gas prices skyrocketed, and the network ground to a halt. Many have been waiting for Ethereum’s next upgrades, and it seems the time has finally come.
The Ethereum network currently exists as a Proof of Work system. Ethereum 2.0 is the process of converting the Ethereum network from Proof of Work to Proof of Stake.
The Design Goals for ETH 2.0 are simple. The aim to increase and foster:
- Decentralization: to allow for a typical consumer laptop with O(C) resources to process/validate O(1) shards (including any system level validation such as the beacon chain).
- Resilience: to remain live through major network partitions and when very large portions of nodes go offline.
- Security: to utilize crypto and design techniques that allow for a large participation of validators in total and per unit time.
- Simplicity: to minimize complexity, even at the cost of some losses in efficiency.
- Longevity: to select all components such that they are either quantum secure or can be easily swapped out for quantum secure counterparts when available.
These changes are set to take place over various phases. There are three phases: phase 0 to phase 2. To learn more about Ethereum 2.0, check out ethhub.io.
Phase 0 consists of adding a component to the Ethereum network called the “Beacon chain”. According to the ethhub ETH 2.0 breakdown: “The Beacon Chain will manage the Casper Proof of Stake protocol for itself and all of the shard chains. There are a number of aspects to this: managing validators and their stakes; nominating the chosen block proposer for each shard at each step; organizing validators into committees to vote on the proposed blocks; applying the consensus rules; applying rewards and penalties to validators; and, being an anchor point on which the shards register their states to facilitate cross-shard transactions.”
The Beacon Chain will be the heart of the new ecosystem being created. As a result of a new blockchain being created, ETH2, which will be a new Ethereum token, will be a new asset for stakers (validators) to be used on the Beacon Chain.
ETH1 is the ETH we all know and use today. ETH2 will be the ETH that can only be used on the new ETH Beacon Chain. There will only be two ways to get ETH2. You can obtain ETH2:
- As a reward for validating the Beacon Chain (and shards after Phase 1).
- Purchasing it for 1 ETH by any ETH1.X user via a registration contract.
Please keep in mind there is currently no way to withdraw or transfer ETH2 from the Beacon Chain in Phase 0. Once deposited in the ETH1.x validator registration contract, the ETH1 is effectively burned. Thus, at the end of phase 0 there will be two active Ethereum chains. To become a validator on the Beacon Chain it will require you to stake 32 ETH.
Phase 1 introduces a very exciting feature called Sharding with cross link functionality. This upgrade is set to tackle Ethereum’s scalability issues. Shards allow parallel transaction throughput and there will be 64 of them deployed in Phase 1 (with the option of adding more over time). The current state of each shard gets recorded in a Beacon Chain block as a crosslink. When the Beacon Chain block has been finalised, the corresponding shard block is considered finalised, and other shards know that they can rely on it for cross-shard transactions.
Crosslinks are a set of signatures from a committee attesting to a block in a shard chain, which can be included into the Beacon Chain. Crosslinks are the main means by which the Beacon Chain "learns about" the updated state of shard chains. Crosslinks also serve as infrastructure for asynchronous cross-shard communication.
Phase 2 is where the ingredients come together to create ETH 2.0.
Shard chains transition from simple data containers to a structured chain state and Smart Contracts will be reintroduced. Phase 2 also introduces the concept of 'Execution Environments (EEs)'.
Overall, if successful, this can mean big things for the entire Crypto ecosystem. Though projects like Elastos have already solved the blockchain trilemma of scalability, security, and decentralization by utilizing their Auxpow+Dpos consensus mechanism, massive projects like Ethereum will always be positive news for the entire ecosystem.
To-date, Elastos has roughly 70% of the Hashpower of the entire Bitcoin network as it is already mined by the largest Bitcoin pools in the world. It’s 3 layer consensus mechanism combined with the power of the Bitcoin blockchain ensures decentralization and security. Meanwhile it’s ability to spawn near infinite sidechains with more than 200TPS per chain as a sort of horizontal scaling solution ensures that their Ethereum sidechains won’t ever clog up.
What makes Elastos’ innovations even more unique is that it blockchain can be merged with any SHA256 blockchain, giving it the possibility to harness even more blockchain power than BTC itself. It can also extend the protection of the bitcoin blockchain down to its side chains ensuring that 51% attacks cannot exist within their ecosystem.
With projects like Ethereum and Elastos leading the charge, we expect to see big innovations as the ecosystem expands.
Published with Permission by Famous Amos and Cyber Republic Press