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What is Ethereum 2.0?

BitForex Editor
Nov 13, 2020

The concept of Ethereum is one that is very popular in the cryptocurrency world, especially as it is regarded as the second-largest cryptocurrency by market cap. While it has been speculated on for a long time, it is safe to say that the Ethereum 2.0 upgrade, a major update to its network, is finally in view. The update aims to address the network's security and scalability by making various changes to its infrastructure, especially the switch from proof of work mechanism to proof of stake model. However, how does the Ethereum 2.0 upgrade function? And what major changes and benefits is it going to provide to its users? While it is necessary to answer all these lingering questions, it is preferably first of all essential to know the meaning of Ethereum 2.0.

What is Ethereum 2.0?

From the name, it can be deduced that Ethereum 2.0 is simply an upgrade or the newer version of the Ethereum blockchain. Ethereum 2.0 can also be referred to as "Serenity" or Eth2. The aim of this upgrade is to boost efficiency as well as enhance the speed and scalability of the Ethereum network in other to it to process more transactions quickly. As the Ethereum 2.0 upgrade is a product of the second-largest cryptocurrency globally, it is necessary for its rollout to be a success.

A major difference that the Ethereum 2.0 release will is provide is that it will cease to use proof of work, which is a consensus mechanism that the Ethereum and Bitcoin network both make use of. The Ethereum 2.0 upgrade seeks to make mining a thing of the past as it shifts its focus to staking. Transaction validation on this blockchain will no longer rely on computing power, which a lot of people believe will make the Ethereum 2.0 upgrade more secure. Another significant benefit it also provides is the substantial improvement in energy efficiency, especially during this period when there are growing concerns about Bitcoin network electricity consumption.

It is also expected that the Ethereum 2.0 upgrade will bring about a substantial boost to capacity; this means that it would be able to handle more transactions in a very short amount of time. Due to the continuous rise in demand, the emphasis on scalability will be an essential factor in ensuring that the network is futureproofing. This can be actualized through the use of a "shard chain," which allows for the simultaneous instead of the consecutive processing of transactions. The launching of Ethereum 2.0 is in several phases, with the launch of the first upgrade expected to be towards the end of 2020.

Ethereum 2.0 Release Date

When will Ethereum 2.0 be released is one question that everyone has been asking for a while. The Ethereum 2.0 was supposed to be launched back in January 2020; however, its release has been delayed or pushed back several times due to last-minute changes to the design of the network, extra testing, amongst other various factors. The founder of the Ethereum Network, Vitalik Buterin, however, seemed confident that the Ethereum 2.0 upgrade would be released by the end of the year, even though other developers don't share the same optimism about the timeline. However, it is crucial to get things right, especially with Ethereum's market capitalization and the numerous individuals who rely on its infrastructure.

It is vital to note that the Ethereum 2.0 upgrade will not appear overnight in full form; instead, it will gradually be released in three phases. The first will be Phase 0, which was scheduled to be released at some point in 2020. This will provide the opportunity for the activation of the Proof of Stake mechanism alongside Proof of Work so as to prevent any interruption or disruption during the process of transition. This is referred to as the Beacon Chain, plus during the Ethereum 2.0 upgrade early stages, mining will proceed as usual.

There is a high chance that those expecting the release of Phase 1 on Ethereum 2.0 upgrade will have to wait until 2021 before its debut with Phase 2 set to follow in 2020, which of course, is only a speculation. It is said that phase 2 will unlock withdrawals, transfers, cross-shard transfers as well as application building ability. Eventually, Ethereum 1.0 will be taken over by Ethereum 2.0, which will mean the end for Proof of Work.

Why Ethereum 2.0 Matters

Numerous and diverse developers depend on Ethereum for building their DApps. The blockchain has served the purpose of creating games as well as decentralized finance services, plus it is most prominent due to its smart contract capabilities. As there is a constant increase in the number of people who use this application, it is necessary that the network be capable of meeting up to the needs and demands of numerous users worldwide.

It is safe to say that the Ethereum 2.0 upgrade promises significant improvements to scalability, accessibility, security, as well as innovations towards making the platform more beneficial for its user. Though its arrival has been much discussed and long-awaited, one thing we can, however, do at this point is wait till its debut day before users can start reaping those benefits.

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