Update on ETH 2.0 and what to expect
Ethereum 2.0 (“Serenity”) will be arriving soon! Bringing improved speed, efficiency and scalability to the Ethereum mainnet. Benefits including higher volume of transaction, mitigating congestion and high gas fees is to be expected with the upgrade. The anticipated launch was announced in 2019. With Phase 0- the beacon chain already launched on December 1, 2020, everyone in the blockchain, crypto and NFT industries is awaiting the roll of the next phases (Phase 0, 1 and 2.0) with bated breath.
Currently, Ethereum mainnet runs on a proof-of-work (PoW) consensus model, meaning the network and its transactions are secured by energy intensive hashing algorithms in exchange for mining rewards and adding new blocks to the chain. PoW is also used by other cryptos like Bitcoin, Litecoin and Dogecoin. Ethereum 2.0 will shift to the Proof-of-Stake model (PoS) and bring the aforementioned benefits to its users. PoS will secure Ethereum’s blockchain via validators with a financial stake in the “stake pools” and allow them to earn holdings over time.
This article will flesh out the timeline of Ethereum 2.0 upgrades and what you can expect from the aftermath.
Why is the Ethereum blockchain upgrading?
Now, let’s dive into what you can expect from the upgrade and why it should matter to you.
To make the Ethereum network more scalable
Ethereum 2.0 will come with increased transaction speed compared to Ethereum mainnet which only handles 15 transactions per second. Whenever the mainnet is busy and congested, the transaction fees will skyrocket as they compete with one another. This causes transaction fees to be larger than the amount of money the user is trying to transfer in the first place.
Ethereum 2.0 promises to perform up to 100,000 transactions without delay to resolve these issues. The faster transaction fees and reduced transaction costs will likely attract more transactions happening on the DeFi network.
To increase security
Ethereum 2.0 will be much more resistant to attacks because of its PoS model, it will become more expensive for hackers to attack the network because every validator has a traceable address. Malicious will be identified and deterred from attacking the blockchain.
To make Ethereum an eco-friendly blockchain
Shifting to the proof-of-stake model makes the blockchain more energy efficient. Validators stake their ethereum in the network and the network chooses only one validator so he is the only one who expends energy in the transaction process when he gets chosen to be a validator instead of everyone competing at once. It will drastically reduce the amount of energy and electricity in the transaction processes.
Phases of Ethereum 2.0: when will they take place?
Phase 0- beacon Chain
The launch of this brand new proof-of-stake blockchain was already launched and tested by volunteer validators on December 1 2020. The beacon chain coordinates the shard chains and the Ethereum mainnet, and introduces staking rewards to validators. It is distinct from and runs in parallel with Ethereum blockchain until Phase 2.0 is complete. Beacon chain is also responsible for selecting the validators.
In a nutshell, its purpose is to coordinate the entire blockchain.
Phase 1 - shard chains
Shard chains will allow immense scalability compared to the Ethereum mainnet. The network will be split into 64 small pieces, or “shards” among a set of nodes, that will be processing transactions and computation independently at the same time. In this way, the shard chains can operate independently from each other to improve scalability and decrease throughput.
According to ethereum.org, this phase will launch and start testing in 2022.
Phase 2.0 - eWASM to replace EVM
Ethereum Virtual Machine (EVM) is an execution environment designed to run smart contracts on the Ethereum mainnet. It emulates a physical machine built on a native operating system to run on many different hardware and operating systems. This makes Ethereum an ideal decentralized network. And gives Ethereum a competitive edge compared to Bitcoin because rather than just being a financial system, it allows a host of games, complex financial transactions and social networks to operate on the Ethereum network.
The switch to Ethereum WebAssembly Machine or Ethereum 2.0 (eWASM) will bring faster speed, higher scalability, superior interoperability and reduced precompilation to the mainnet. The software is also designed to be more readable and easy to debug, allowing developers to view, write, and build upon the code.
The overall upgrade is expected to complete in 1 -2 years according to Ethereum’s official website.
Ethereum 2.0 outlook
As each stage happens, the developers at Ethereum will perform tests to ensure the upgrades are secure and stable. Ethereum and its scaling solutions make up 55 % of the DeFi ecosystem, 90% of the NFT industry and the burgeoning Metaverse, all of which are being built on Ethereum’s blockchain. On top of this, its wide-spread adoption and its drastic reduction in carbon footprint, an increase in the use and demand for Ethereum 2.0 are to be expected.