The next update of the Ethereum Blockchain network towards 2.0, which seeks better scalability, has become an event for the crypto world. It is the second digital currency in Market Cap after Bitcoin according to CoinMarketCap.
The Ethereum update has been announced for quite some time and, by the end of 2020, it is expected to enter the scene. The expectation of working with the Proof-of-Stake is great and a lot of opinions can be found on social networks.
This time, a summary of the most essential aspects of this update is presented. In this case of the accessibility, speed and the improvement in the scalability of the network, one of the weak points of this cryptocurrency.
This is how the whole process leading towards Ethereum 2.0 started
The idea for Ethereum 2.0 was yearned for by the majority of the community. This is not a new idea, but is a final product of a series of updates planned for the network since 2015.
The most important of these updates have been: Homestead (2016), Metropolis: Byzantium (2017), Metropolis: Constantinople (2019) and the most recent Istanbul (2019). All these updates were made within the Proof-of-Work (PoW) scheme.
The arrival of Ethereum 2.0, it is a radical turn in the whole scheme. Mainly, because PoW is replaced by Proof-of-Stake (PoS). This is the backbone of the update.
Lack of scalability is the main factor that pushed the development of Ethereum 2.0. It is important to mention, at the same time, that the Blockchain of this cryptocurrency does not overcome the gap of 15-20 transactions per second. This constitutes a great weakness that prevents large-scale use.
When compared to other projects, such as the Solana Blockchain, Ethereum lags far behind. The first boasts of processing up to 59,490 transactions per second.
Istanbul brought hope and many expectations, it is to open the way for the transition from PoW to PoS. According to Ethereum co-founder Vilalik Buterin, the blockchain capacity of the post-Istanbul network would be around 3,000 transactions per second.
What will the Proof of Stake bring?
As already stated, PoS is the most important of the network changes. It means a complete change of the Blockchain validation structure. Ethereum 2.0 can be translated as everything related to PoS.
PoS comes to overcome two major headaches of the Ethereum community, they are scalability and accessibility. In the first case, it should be noted that, until now, with PoW, blocks are mined in sequence and each block has a capacity cap.
This means that if the number of transactions exceeds the limit of one block, the remaining transactions must wait for the next blocks. For this reason, criticism of Ethereum’s slowness has been constant.
The other problem that Ethereum 2.0 would overcome is accessibility. Miners with PoW have been a key part of keeping the networks decentralized. However, the costs to access are very high. Electricity and hardwares are not easily accessible to everyone.
Thus, with Ethereum 2.0, it seeks to open the field for greater participation of validators. They will no longer have to pay a high cost to be part of the network, taking into account that electricity and hardware are no longer a necessity for validation.
How to validate in Ethereum 2.0?
To validate on Ethereum 2.0, instead of hashing power, you will need to deposit a minimum of 32 ETH in the Official Deposit Contract developed by the Ethereum Foundation. Validators should download the client 2.0 software and start operating on it.
An important option is to access external pools or providers to bet your 32 ETH. The ecosystem of this cryptocurrency offers a series of products and solutions. They include the ConsenSys PegaSys and Codefi teams.
PoS and fragmentation will bring significant improvements to the Blockchain so that Ethereum 2.0 brings the desired scalability of the network. In addition to it, it will bring more security and accessibility. Holders will also have great opportunities to receive payments for helping maintain the network.
Data to consider
- Before Homestead, the Ethereum network had protocols like Olympic after it launched in July 2015 and two months later the Frontier.
- The Frontier protocol brought with it important concepts such as and usabilities such as Gas and Canary Contracts.
- The Proof-of-Work is kept running through mining. The use of hardware and electricity play the main part in the competition for blocks.
- Following the upgrade to PoS, mining with PoW will continue simultaneously for a period of time in a hybrid system.
The information in this content has been extracted from reliable sources detailed below:
1- Professional handling of content by the authors of CriptoTendencia.
2- External sources: CoinMarketCap.com, consensys.net, dapp.com, solana.com, github.com, pegasys.tech, eth2.ethernodes.org and codefi.consensys.net.