Ethereum 2.0 is in the news, people are actively investing in ETH and eagerly waiting for ETH2.0 to launch. While developers are interested and talking about the new technological aspects, some are just talking about how the value would increase. Amid the noises, Moving brings the signal, clear and loud, just for you!
What is Ethereum 2.0?
Ethereum 2.0 is a long-awaited update in the Ethereum network. The update is estimated to solve the scalability issues that the ETH blockchain has faced in the past. These updates won’t be appearing suddenly altogether rather would be launched in three major phases — Phase 0, Phase 1/1.5, and Phase 2.
Ethereum 2.0 would target the “Scalability Trilemma” which comprises security, decentralization, and scalability. These issues would be solved by making some major changes in the blockchain. While security and decentralization are the secondary concepts here, Ethereum 2.0 launch is awaited to increase the scalability of the blockchain.
A Deeper View:
Scalability is one of the major issues that bitcoin and Ethereum faced. This drawback has played a significant role in the fact that people won’t fully accept these as a permanent mode of payment in daily life. Bitcoin currently offers 7 transactions per second and Ethereum offers 30 transactions per second, which is a very small number while comparing to PayPal and VISA. Here is a better view and how Ethereum 2.0 would solve this major issue.
The fewer number of transactions resulted in higher gas fees and with Ethereum 2.0 which is estimated to support 100,000 transactions per second, the blockchain would be efficient and faster than ever.
What are the Major Changes to look out for?
Proof of Work consensus method, previously used in Ethereum would be no longer be used in the upcoming update. This wouldn’t just make the network sustainable but would also contribute to speeding up the verification and validation process of the blocks. Ethereum 2.0 would be using Proof of Stake as a method of consensus. In simple terms, Proof of Stake is forging older blocks to create new ones. Scalability in POW is not possible and hence POS solves this issue by replacing compute power with “skin in the game”.
For anyone to become a validator, one has to lock 32 ETH or stake 32 ETH. Read more about Staking, here.
Previously each node is supposed to contain all the information of the entire blockchain. In order to validate a transaction, a single node to download, compute, store, and process every single transaction since the beginning of Ethereum’s existence. This eventually slows down the process or validation of the transaction. The user may not even need all that information in the first place.
Shard chains are just like any other blockchain, except they only contain specific subsets of one whole blockchain. This helps nodes by only having to manage a slice, or shard, of the Ethereum network. This should increase transaction throughput and Ethereum’s overall capacity.
eWASM to Replace EVM
eWASM: Ethereum WebAssembly
EVM: Ethereum Virtual Machine
One of the major significances that Ethereum blockchain holds is its programmable nature, unlike Bitcoin. Ethereum has played a major role in challenging the dominance of the Bitcoin Blockchain in the crypto space. We witnessed new and innovative ideas emerging as De-Fi projects. While this brought a revolution altogether, the downside is the restrictions. Ethereum EVMs restrict developers to use only a single programming language while coding on a blockchain.
eWASM would allow the programmers to choose from a variety of languages while developing on a blockchain. The programmers can choose from several languages like Rust, C, and C++ to write code to run on the blockchain. This would make things easy and bring more people into the ecosystem to develop.
Ethereum 2.0 is more than hype. One of the major questions that people wish to know is what effect would it make on the price of the token. The estimate is that the value of Ethereum would increase as the network would be better in terms of security, scalability, and decentralization. With ETH 2.0 supporting 100,000 transactions per second, the gas would lower. Since most people using crypto are third-world citizens, making small transactions would be efficient and pocket-friendly.