The Ethereum 2.0 Cheat Sheet
Several names are given to the Ethereum 2.0 update. All credit goes to the release’s phased approach. Ethereum 2.0 is also known as ETH2, which is also known as Serenity. People have been waiting for an update to the Ethereum Blockchain network for a long time.
Over the upcoming few years, the Ethereum 2.0 update will be rolling out in multiple phases. If everything stays on the correct track, it will be beginning to roll out anytime soon.
Proof-of-stake (PoS) protocol v/s Proof-of-Work (PoW):
PoS and PoW are the consensus mechanisms. It is a simple way for all of the computers inside a network to agree on factors like transaction data validation. Thus, the blockchain foundation’s key aspect is the consensus mechanism.
PoW is all about making use of the computer power for performing guesswork to validate the transaction data’s block and publish that particular data to a computers’ network across the globe. Thus, PoW facilitates both Bitcoin and Ethereum blockchain development of newer versions for processing transaction data.
However, PoW offers some problems as well. They are as follows:
- It consumes both time and energy because of the electricity used by the computers while performing continuous mathematical operations for competing with one another for validating transactions.
- It makes the network somewhat centralized. The large mining operations turn out to be the only miners having the ability to complete and generate profit from performing the computations.
- When it comes to confirming transactions, PoW proves to be highly time-consuming. It does not facilitate instant transactions.
On the other side, PoS offers the following:
- PoS makes use of an algorithm that picks up the computers that will be validating the upcoming block. The participating computers are called Validators. Contrastingly to PoW, a new blockchain is included in the blockchain and is “forged.”
- PoS needs validators for staking on-the-network cryptocurrency. Staking in terms of cryptocurrency means withholding crypto inside a smart contract or a wallet for a certain period in exchange for rewards, interest, or similar to it. And for doing so, one needs to opt for top-notch Ethereum wallet development.
- PoS picks are the validators that are going to verify the upcoming block and can take into consideration the variables such as the cryptocurrency amount staked by the validator, the time amount that crypto was staked, and can also select validators randomly for ensuring the validation processes’ decentralization. If the rest of the network approves and adds the verified block in the blockchain, the validator will receive a reward for doing the block verification.
- In case of fraudulent transactions in the blocks, the validator will be penalized by eliminating a few of their staked crypto and by limiting or revoking their rights completely from participating. If downtime is faced by a validator, a penalty will take place for making sure that the fleet of the validators of Ethereum is reliable and stable.
In short, PoS is faster and more energy-efficient compared to PoW Ethereum crypto solutions.
Ethereum 2.0 is being developed on a whole new network of blockchain called the Beacon Chain. The latest Beacon Chain and Ethereum 1.0 will be associated. Thus, it will be operating inside the same E2H2 ecosystem. So, right from the original network of Ethereum blockchain solutions, you can transfer ETH and other assets to the latest ETH2 network.
New methods to validate data blocks will be implemented. It is going to be the most instrumental update. The target of Phase 0 is to test the functionality of the new validation, offer time to the system for getting stabilized, and determine if any changes are needed before developing ETH2 on the new foundation.
The trilemma is a problem that exists in every blockchain system. Trilemma prevents from achieving consistency, decentralization, and scalability. In Phase 1, to combat the trilemma problem, ‘Shard Chains’ will be implemented. It involves the partitioning of large databases into multiple faster and smaller ones.
The partitions are known as ‘Shards.’ Each of the shards will be representing the whole Ethereum 2.0 database’s fraction. All the shards are linked to the Beacon coin, which ensures consensus between all of them.
64 shards are going to be deployed and attached to Beacon coin in Phase 1. The motive of Phase 1 is to check the architecture of the shard chain and make sure that all the consensus is successfully maintained between the shards by the Beacon chain. In Phase 1, no operation of real applications or data will be executed.
In phase 2, the real application and data will be started to operate on the Ethereum 2.0 network. The latest virtual machine known as EWASM will replace the traditional EVM. EWASM is specially modified for running the Ethereum 2.0 ecosystem. It is efficient, portable, secure, and fast.
The shards will be beginning to manage and house smart contracts and real data. Also, a new range of programming languages will be supported in Ethereum application development. Thus, in phase 2, ETH2’s full functionality will finally be available.
Phase 3 and beyond:
New updates to consensus and scaling will be coming out, along with advanced technical updates for maintaining the ETH2 ecosystem.
The capability of Ethereum to revolutionize society is constantly unfolding, leading to the increase in demand for Ethereum substantially. For this very reason, Ethereum needs a huge update. It will try to upgrade the existing ETH2 ecosystem and improve the network’s performance.
However, if you are not much acquainted with Ethereum and its versions, seek professional help from a reputed Ethereum development company.