Home
News
Ethereum 2.0 is basically an upgraded version of the current Ethereum blockchain. Also known as “Serenity,” or ETH2, it envisions enhancement in speed, scalability and efficiency of ETH network so it is able to handle more transactions as well as ease bottlenecks.
It is still under development. Ethereum Foundation clarified back in January that it will cease to call this upgrade as Ethereum 2.0. To be very clear, this is just a network upgrade instead of the latest network.
This is why ETH1 is now called as execution layer, which is a lair for network rules and , and ETH2 is called as consensus layer.
Major difference among Ethereum 1.0 and Ethereum 2.0 will be that, ETH1 operates on Proof of Work algorithm and ETH2 will operate on Proof of Stake algorithm.
How Is Proof of Stake (PoS) Differs From Proof Of Work (PoW)?
With blockchains such as Ethereum, there is a requirement to verify transactions in a decentralized manner. Ethereum, similar to other crypto assets such as Bitcoin are based on the Proof of Work algorithm.
Here, in Proof of Work, miners are dependent upon computational power of machine to solve sophisticated math puzzles and validate latest transactions. Initial miner to solve adds a latest transaction to transaction records on blockchain. Then they receive rewards in indigenous crypto asset.
Is Ethereum 2.0 Really Going To Make Ethereum 1.0 Scalability Better?
Among the core reasons for this update is scalability.
Present Ethereum network can only handle about 30 transactions/s: this creates congestion and delays. Ethereum 2.0 pledges to manage up to 100,000 transactions per second. This elevation will be attained via shard chain implementation.
How Secure Is Ethereum 2.0?
Ethereum 2.0 is modeled with security in mind. Majority of Proof of Stake networks have a minor cluster of validators, which creates for a more centralized network and reduced security of network.
Ethereum 2.0 needs a minimum of 16,384 verifiers, rendering it highly decentralized, and eventually secure.
How ETH2 Can Influence Ethereum’s Value?
Increased scalability means more utility, which, in turn, means increased demand. Which — at least theoretically — may propel Ethereum value to new heights. It is also anticipated that Ethereum 2.0’s launch will lower down gas fees.
Moreover, keeping an eye on core milestones will reinforce momentum of Ethereum developers. As per Blocknative CEO, Matt Cutler, their client base is witnessing a reduced transaction fees and elevated network throughput as massive window for moving ahead.
Cutler also added that, This might also have a long run bullish influence on Ethereum value — notwithstanding short run volatility, that is a part and parcel of cryptocurrency valuation.
What Future Holds For Ethereum 2.0?
Future, as we know it, is always uncertain, and many things have shifted from here to there on this road.
For example, former roadmap iterations placed the Merge event after shard chain release. That was shifted after elevation in L2 scaling solutions, as per Ethereum Foundation. Therefore, it stated that, priority has changed from swapping proof of work to proof of stake through this merge.
Back in March 2020, Vitalik Buterin, co-founder of Ethereum, rolled out a roadmap of how upcoming 5-10 years may plan out for ETH2.
He stated that a plethora of barriers, are being developed at a faster pace, and it’s share of pie will bolster over time.
Back in June 2020, Ethereum 2.0 will require to depend upon present scaling approaches like ZK-rollups for at minimum of 2 years before stationing shard chains.
August 2021, witnessed stationing of Ethereum’s London hard fork as well as Ethereum Improvement Proposal 1559 or EIP-1559, which transformed how transaction fees operated on network.
London hard fork acted as something of a trail run for upcoming phase of Ethereum 2.0, with Vitalik Buterin exhibiting his confidence regarding next moves for ETH network.
Vitalik also stated that, London hard fork is an example of how influential is Ethereum network, and makes him more confident regarding merge.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
