Did you know 7,000+ cryptocurrencies are there as of now? Coming to Ethereum, it is the second largest cryptocurrency. Recently there was much buzz about the better version of it Ethereum 2.0 , lets know about it.
Ethereum 2.0: In A Nutshell
Ethereum 2.0 comes as an upgrade to the Ethereum blockchain. The main goal of Ethereum is to improve the Ethereum network in terms of scalability, efficiency, and speed. As a result, the network can alleviate bottlenecks and enhance the count of transactions. Serenity or Eth2 are the pseudo names for Ethereum 2.0.
When Ethereum 2.0 is compared with its predecessor, the Ethereum 2.0 comes with a few basic changes in terms of design and structure. Among other changes, two key changes are “sharding” and “proof of stake.”
Features of Ethereum 2.0
You must have heard about “sharding” and “proof of stake” as the major changes of Ethereum 2.0. Hence, it is time to know about these two changes individually to comprehend the contributions of Ethereum 2.0.
Proof of Stake:
When it comes to the proof of stake consensus mechanism, validators/Stakers (of the Asset) come to the picture instead of miners. The key contributions of validators is to suggest new blocks, offer computing power, bandwidth, and storage to confirm transactions.
Validators/Stakers help to safeguard Ethereum for everyone and achieve new Ether (ETH) in the process. This is termed as “proof-of-stake.” The Beacon Chain has introduced proof-of-stake.
In Sharding process, we can divide one blockchain into more than one blockchains, called shards. Shards boosts the efficiency of the whole network. Thus, a single validator doesn’t need to manage the entire information. That means each validator needs to maintain information only associated with the respective shard.
Such validators are shuffled between shards on a daily basis. It helps to eliminate any sort of manipulation. Moreover, the Beacon Chain contributes to the coordination as well as communication of the shards.
Work Structure of Ethereum
When it comes to Ethereum 2.0, the validators come as the most crucial factor. In other words, they contributes as the only factor for the maintenance and infrastructure of Ethereum 2.
Every validator features two keys. One is a signing key and the other is a withdrawal key. When it comes to a signing key, it contributes to performing “work for the blockchain.”
A validator performs three key functions. It is:
- To confirm the validity of the shard chain shard and beacon chain
- To suggest and include blocks in one of the shard chains and in the Beacon Chain
- To report the malicious conduct by other validators
For all the above reasons, the signing key needs to be online round the clock.
Ethereum 2.0: The Future
Ethereum comes as the biggest general-purpose blockchain in the contemporary market since its inception in 2015. Over 1,400 Ethereum projects have been developed since its launch. And the Ethereum upgrade will be introduced in 3 phases: phase 0, phase 1, and phase 2.
Phase 0 was already rolled out in December 2020 upon the execution of the Beacon Chain. The phase keeps the library of validators.
Moreover, it also makes use of the proof of work consensus mechanism. Phase 1 is expected to be introduced in 2021. Furthermore, the integration of the shard chains will occur. 64 shards are anticipated to be introduced in this regard.
When Phase 2 will roll out, the shards will be 100% functional and suitable for smart contracts. Phase 2 is anticipated to be launched in 2021/22. It is going to be an upgraded version due to the additional features.
In short, Ethereum 2.0 will achieve more and more exposure from users and investors in upcoming years. The credit goes to its advanced features as well as scalability.