“Ethereum 2.0” is a broad term for Ethereum’s next step toward becoming a network that works faster, easier, and with lower fees. If we compare this great transition with the car industry, then it’s about the same as switching from a gasoline engine to an electric one.
What Is Ethereum 2.0?
Ethereum 2.0 has been coming together for several years. It is not a one-time thing. It began with the launch of the Beacon Chain in December 2020, which made it possible to stake Ether (ETH), the Ethereum network’s native token.
Staking is the process of holding tokens for a certain amount of time to support the security of the crypto network and verify blocks in the blockchain. Proof-of-stake is a process that lets the investors get paid for staking.
In other words, Ethereum is switching from a proof-of-work (PoW) model (when you have to mine to earn your coins) to a proof-of-stake model. As a result, the blockchain will become much more secure and able to handle more transactions.
When Will Ethereum 2.0 Arrive?
A series of “merges” with testnets marked the start of the second phase earlier in 2022.
In September 2022, a merge with the Ethereum mainnet is planned to complete it. Simply said, the Beacon Chain is being integrated with multiple testnets via these mergers. Ethereum will have formally switched to a PoS model once the Beacon Chain completely joins the Ethereum’s mainnet.
Ethereum 2.0 update will also introduce sharding, which addresses the scalability of the network. Sharding follows the merges and is the final phase of the Ethereum 2.0 transition. By 2023, this stage should be over .
What Will Be Different With Ethereum 2.0?
There have been slowdowns on the Ethereum network because of how busy it is. For instance, the gas fees that miners get paid for their work can sometimes be very high. It can improve after Ethereum 2.0, as validators who stake Ether will be responsible for securing the network.
- Proof-of-stake uses much less power than proof-of-work, so it is faster and better for the environment. Experts think that PoS will make the network easier to grow and will cut its energy use by about 99.95% .
- At the moment, the network can handle about 25 to 30 transactions per second, but Ethereum 2.0 promises to be able to handle 100,000 transactions per second .
The sharding technique will be used to get to that high level of scalability. This change will see 64 “shard chains” put to use, which run through transactions in parallel. It could theoretically record transactions 64 times faster than the Ethereum network we have now .
We Support It Too!
Blocktrade is committed to supporting the Ethereum community and we are thrilled to see the network transitioning to a Proof-of-Stake system. Eliminating Proof-of-Work will reduce resource consumption and make Ethereum more eco-friendly, which we believe will greatly enhance the Ethereum ecosystem.
We might halt deposits and withdrawals a few hours before the Merge, in order to protect user funds. Once we have determined that the PoS network is secure to use, we will re-enable deposits and withdrawals. In the meantime, ETH trading will continue as usual.
We thank you for your patience and support during this exciting time!
Ethereum will have made its biggest shift with proof-of-stake and sharding. The upcoming transition is receiving a lot of attention from market analysts and industry insiders, and for good reason. It will definitely have a huge impact on the way many niches work, not the least of which is decentralized finance (DeFi).
Come on Ether, you can do it!