Yes this is a reminder to anyone who is tired of paying high fees in Ethereum to the miners. Ethereum has been on the rise lately, which is why Ethereum fees are also rising. These fees are rising to unprecedented levels and this makes no sense. For example, why would you want to pay $ 40 to send $ 100? Nobody wants that! That is why I am also a big supporter of the development of Ethereum 2.0. And if Ethereum 2.0 will be live then there is good hope that these ridiculously high fees will disappear.
Waiting for Ethereum 2.0 is very annoying to say the least. especially in times where the fees are rising and the miners are getting rich on the back of normal Ethereum users. Of course I am not necessarily against paying fees, but this makes no sense. But Ethereum 2.0 will put an end to this, if this does not happen, this could ensure that the rise of Ethereum could be strongly inhibited. Because there are also other projects that are eager to take over some of the Ethereum market. But how does Ethereum 2.0 work roughly. I will explain that below this article.
Eth2 refers to a set of interconnected upgrades that will make Ethereum more scalable, more secure, and more sustainable. These upgrades are being built by multiple teams from across the Ethereum ecosystem.
this post wil cover the following:
- What is Ethereum 2.0
- The fees
- Beacon Chain phase 0
- Sharding Chain phase 1
- eWASM (Ethereum Virtual Machine) phase 2
- Final thoughts
What is Ethereum 2.0?
Ethereum 2.0 is completely different from the Ethereum you are used to. It is much more scalable, more energy efficient, faster and runs on the Proof of Stake algorithm. Ethereum 2.0 also runs on a so-called sharding chain and a new virtual machine eWASM.
Ethereum to Ethereum 2.0 is a very big change, but this ensures that the major issues surrounding Ethereum are being addressed. Ethereum 2.0 can process many more transactions, process transactions cheaper and ensure that transactions are processed faster. And this will also make the projects running on Ethereum much easier, faster and cheaper to use.
Now the developers of Ethereum are going to make sure that Ethereum moves from Proof of work to proof of stake. The proof of stake system will ensure that Ethereum will become more decentralized again, much more than it is now. To become a validator you need at least 32 ETH. This makes you responsible for processing the transactions. Basically the same thing the miners are doing now. People who do not have 32 Ethereum can participate in the stake process via so-called pools.
It can also be said that this is the biggest update that Ethereum is waiting for. This update will be released in a specific order. 3 important phases in the update are the following:
- Beacon necklace
- eWASM (Virtual Machine)
Yes, I will continue with these fees. But it is clear that this is something that a lot of people on the internet are complaining about. But let's see how these fees will disappear and proof of work takes over. Ethereum is also a very large network that consists of connecting computers. Ethereum still uses proof of work, and Ethereum users pay for the use of this network. Whether it concerns shipping, exchange or other forms of use, you pay a fee for this. The miners must of course be compensated for the costs they incur, but if you can no longer send small amounts in Ethreum then it stops for small users.
The problem is that the miners can favor or deny transactions altogether. Which of course is just weird. It would be fairer to base fees on the amount to be sent, but not on network usage. Just now, miners can charge ridiculously high prices for sending a few dollars. Now Ethereum 2.0 must ensure that the gas problem is solved. As a result, the use of Ethereum must be able to take place in a cheaper and fairer way. Now this will also ensure that the use of DEFI projects will become much cheaper. This is also a big advantage for me. Because why would you lock a little bit of crypto in a DEFI protocol to receive it back afterwards and do you have to pay high fees.
Beacon Chain phase 0
The first fhase is called Beacon Chain and is also the main chain of the Proof of Stake network. This means that a new chain will exist alongside Ethereum 1.0 at that time. A second coin will therefore emerge from Ethereum 2.0. It will be issued 1: 1 to Ethereum holders.
This so-called ETH2 token will be used to verify transactions and add them to the new chain. These tokens must then be used by the validators in order to be eligible to verify transactions. To become a validator you must have at least 32 ETH2 tokens.
Initially, this chain will not support the following:
- Smart contracts
- ERC tokens
This chain will only be used for new token transactions. Smart contracts and ERC tokens will be added at a later stage.
When everything is done and completed around the beacon chain there will be 2 chains. I will call these Ethereum 1.0 and Ethereum 2.0 for convenience. At the moment, Ethereum 1.0 token holders could exchange their tokens for ETH2 tokens. This also allows them to become validators. The Ethereum 1.0 coins will then be burned using a smart contract.
Sharding Chain phase 1
The Shard chains must ensure that there will be great scalability. It actually means that large data will be reduced in order to make it easier and faster to use it.
The network will consist of small chains that will run in parallel. For each of these chains, validators will be selected who will add new transactions on these chains. These chains will then be added to the Beacon chain and the transaction will be marked on these shard chains already confirmed.
At the moment Ethereum 1.0 and Ethereum 2.0 will work together. Ethereum 1.0 will not be used for implementations and experiments will be done on Ethereum 2.0. Block rewards will be awarded on both chains. This will then lead to inflation from Ethereum which is said to come down to 1%. Because the Proof of Work algorithm that Ethereu is currently working on will slowly be broken down.
eWASM (Virtual Machine) phase 2
eWASM is a virtual machine for Ethereum 2.0. This makes it possible to add smart contracts and dApps to the Ethereum 2.0 chain. This is also called the final stage that will be added after adding the sharding chains. If everything goes well, the developers will use this phase to create smart contracts for Ethereum 2.0.
With this virtual machine you can execute smart contracts and dApps on the different sharding chains. A smart contract created only for a particular shard chain will only affect these specific chain transactions. For a dApp, a certain shard chain will have to be chosen.
As it stands, the beacon chain will be rolled out in 2020. And later the chain sharding and eWASM will be rolled out.
High gas prices, slow ethereum network and few transactions per second. That's what I think about when I think about Ethereum. Now Ethereum 2.0 must ensure that these issues are addressed and resolved. This will require a switch to a new algorithm, an exciting step for Ethereum. Many things can still go wrong, which can further delay the project. But for the time being, I see the transition going well, but a lot still needs to be done before the project can really be seen as a success.
In addition, a lot of information may come out about the implementation of the new protocol. It is therefore important if you are interested in this or if you have Ethereum tokens to follow this news closely. Furthermore, I am most curious what it will eventually cost obder Ethereum 2.0 to be able to send Ethereum. And what I also find a very interesting development is the use of DEFI products on top of the Ethereum network. These products will also become easier, faster and hat buyer to use. It remains to be seen how this will all turn out. But I am hopeful that this will be done in a good way.
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A few easy steps to keep your crypto safe:
- Never give someone your 12 / 24 passphrase!
- Never give someone your private keys!
- Not your keys not your coins!
- Just don't send any coins to strangers that ask for coins to double your investment!
- Don't use a centralized exchange as a wallet!
- Don't use centralized exchanges if this is not required!
- If you send your coins or tokens think twice before doing so!