What Is Ethereum 2.0?
As mentioned earlier, Ethereum 2.0 is an upgrade to Ethereum, resolving the majority of its issues so Ethereum can evolve to the next level, thus moving on to the next stage. Also known as Eth2 or "Serendity," Ethereum 2.0 significantly changes the way it functions in several significant factors in comparison to its earlier stage. One of the most prominent changes is the change of PoW (Proof of Work) to PoS (Proof of Stake). In a PoW blockchain, miners use their computing power to solve complex mathematical equations and verify newly created transactions. The first miner to complete the mathematical equation makes a new transaction inside the blockchain's record of transactions, which are then rewarded with crypto coins. This process can be straining to a blockchain, which is currently evident in the Ethereum blockchain.
On the other hand, PoS is achieved differently for theoretically a better blockchain. Instead of having miners, PoS has transaction validators stake crypto so they have to privilege to verify a transaction. These validators can propose a block depending on the amount of crypto staked and the time they held the crypto. Other validators then verify these blocks, and after enough verifications, the block becomes added to the blockchain! Once a block is successfully made, all validators are rewarded for their efforts with crypto. This is known as "forging" or "minting," which powers a PoS blockchain. This is what Ethereum 2.0 is: a PoS blockchain rather than a PoW blockchain.
How Will Ethereum 2.0 Affect Its Blockchain?
Ethereum 2.0 is promised to massively improve the Ethereum blockchain, making it more suitable for its developers and users. The three most significant factors that Ethereum 2.0 address are its sustainability, scalability and security.
Since Ethereum 2.0 will use less computing power and energy through the projected implementation of PoS, the Ethereum blockchain becomes much more sustainable. Tons and tons of electricity would be used to run the Ethereum blockchain, which is becoming concerning with the current model of Ethereum that negatively impact the Earth's biosphere through carbon emissions bringing the electricity. With Ethereum 2.0, there is less electricity use, and hence less of an impact on the biosphere for a more sustainable crypto ecosystem.
The current Ethereum blockchain can only make approximately 30 transactions per second, which is inappropriate with its dramatic rise in use that beings delays and congestion. This is why Ethereum transactions are expensive and take longer because its blockchain is so clogged up with its users! Ethereum 2.0 promises to support up to 100,000 transactions per second (over 3000 times than before!), obviously clearing up the system. This means more people can use it reliably and it can support a higher volume of transactions, thus making Ethereum 2.0 have greater scalability.
Most PoS networks currently established have a small number of validators that make it a more centralised and less network secure blockchain. One major example of this is the BSC (Binance Smart Chain), which is essentially run by validators all owned by Binance. What this means is that they can choose how the blockchain works, making it centralised and less secure. Also, Binance can choose to pull the plug out any time, shutting down the blockchain, though that is unlikely. With Ethereum 2.0, they are setting a minimum of 16,384 validators. Why this exact amount? I do not know, but what I do know is this is enough to make it a decentralised network, and so secure.
When Will Ethereum 2.0 Be Released?
Ethereum 2.0 will not be released anytime soon, being released in a step-like manner. It will be done through 3 phases (namely Phase 1, Phase 1.5, and Phase 2) over the next year and so, projected at 2021/22.
Phase 1 will integrate the PoS shard chains in 2021. The network is predicted to launch with 64 shards, but will not support accounts or smart contracts. What 64 shards mean is that it will be 64 times faster than the current Ethereum blockchain in terms of supporting transactions and so forth, which is amazing!
Phase 1.5 will be the interim update that officially establishes shards, moving towards PoS. This stage is also expected to occur in 2021.
Phase 2 is the final stage and is placed in 2021/22. This will have Ethereum 2.0's shards fully functional with smart contracts now compatible. Ether accounts are now added to Ethereum 2.0 with the following permitted: transfers, withdrawals, cross-shard transfers and contract calls. On top of Ethereum, 2.0 will support scalable apps by building environments for them where they can develop.
That is the end of today's article! I hope you found the information helpful and entertaining, giving insights into another exciting area of the crypto world! Ethereum 2.0 personally is an excellent way to resolve the nagging issues of the current Ethereum blockchain, making it more secure and effective for its users. I believe it will abate the overbearing dislike upon it, welcoming back an influx of users to speed up their development and make the crypto world a better place!
Running through the basics of Ethereum 2.0, I learn what the future has to offer for the second-largest cryptocurrencies in the world, understanding more of what the crypto world has to offer.