Ethereum 2.0 or Eth2 or Serenity is the set of upgrades that are going to take Ethereum to the next level.
Ethereum is the world’s second-largest currency and is also known as the queen of cryptocurrencies.
Ever since the inception of cryptocurrencies, Bitcoin has been the market leader, and other coins have been trying, unsuccessfully, to take its throne. The king of cryptocurrencies, Bitcoin, has achieved new all-time highs and competing coins have taken a backseat to its successes.
Why is Ethereum launching Ethereum 2.0?
Ethereum has peaked at $600 in 2020 after two years. Even though the prices crashed soon, it has regained quickly. This surge in Ethereum prices is being contributed to the long-awaited launch of Eth2.0. Ethereum 2.0 had been in the making for quite some time but kept delaying. Investors have been eyeing it keenly, believing this might be what makes the queen overthrow the king.
Blockchains, the digital ledger, of most of the cryptocurrencies have a “proof of work” modus operandi. Like gold mining, “miners” mine cryptos by solving complex puzzles to validate transactions. The miners, in turn, are rewarded in cryptos.
The highlight of Ethereum 2.0 is the “proof of stake” model. In this model, “stakers” who already are in possession validate transactions. Unlike the “proof of work” system, stakers need to be eligible for validating translation by having possession of 32 ether tokens in their crypto wallets. 32 tokens are equivalent to $19,600, currently. However, like miners, stakers are also rewarded in tokens for validating transactions.
The Proof of Stake upgrade ensures greater security, higher efficiency, and increased scalability.
What is Ethereum Shard Chain?
A shard chain system is integrated into Ethereum 2.0 to improve the transaction speeds. This system will result in improved output across the Ethereum blockchain. Currently, a single chain is made up of consecutive blocks that process information. Whereas, a shard chain system splits the blockchain into 64 shards which enable data to be processed simultaneously rather than consecutively, improving transaction time.
The Ethereum 2.0 Roadmap
In the first stage, stage 0, the implementation of the “beacon chain” has been planned. The “beacon chain” stores and manages the network of all the stakers that are going to implement the PoS system. In the initial stage, both the new PoS as well as the older PoW system will be running simultaneously for a smooth transition.
Image source: Consensys https://consensys.net/blog/blockchain-explained/the-roadmap-to-serenity-2/
The second stage is set to be rolled out in 2021. The shard chain mechanism will be integrated into Ethereum 2.0 in this stage. This mechanism will be able to improve the speed at least 64 times.
The final stage will be launched somewhere in 2022. The exact plan for this stage is still not clear, but the addition of ether accounts to enable transfers and withdrawals along with other upgrades are planned. The transition from the PoW to the PoS system will be completed in the last stage, and the PoW mechanics will be shut down.
All in all, some exciting things are in store for Ethereum’s future, and Eth2.0 is most likely going to blast the price of Ethereum.
The founder of Etherum Vitalik Buterin Is always posting the latest news for Etherum 2.0 and you can follow him on Twitter.
The roadmap I made back in March updated with (very rough and approximate!) progress bars showing what has been done and some of the recent tweaks to the roadmap itself.
A lot has been accomplished, but still a lot remains to be done! pic.twitter.com/4zIK4aTNTh
— vitalik.eth (@VitalikButerin) December 1, 2020