The Real Game Changer in The Blockchain World — ETH 2.0
Tags: Eth20, Ethereum, Eth, Sharding, Pos

Excluding Bitcoin, Ethereum might be the most important project in the blockchain world, the second highest market cap in all cryptocurrencies, and the mothership that allows other blockchain projects and DeFi applications booming. Ethereum introduced smart contracts and brought the blockchain world to the “Generation 2”. But gradually, some problems pump up in the more and more congested Ethereum blockchain.

So, here comes the savior — ETH 2.0, intent to fix everything in the ETH 1.0 and might enable more applications available. Now, ProEX would like to introduce what is ETH 2.0 and how it may change the blockchain world.

ETH 1.0 — Metropolis Constantinople

Basically, Ethereum 1.0 did a great job in building different blockchain applications, but as more applications are based on Ethereum blockchain, the cost gets higher and speed gets slower. Due to the naive feature of Ethereum 1.0, the transaction processing speed is only between 15–20 transactions per second (tps) when the network congestion, it may severely restrict the development of Ethereum applications.

Moreover, the proof-of-work (POW) consensus algorithm has been challenged about it seeming to be more centralized as the mining pools rises, and also it uses too much electricity to maintain the Ethereum blockchain.

ETH 2.0 — Serenity

The main goal of Ethereum blockchain is “Grow Ethereum until it’s powerful enough to help all of humanity”. So most importantly, Ethereum needs to improve its scalability, security and sustainability. Thus, ETH 2.0 replaces the POW with proof-of-stake (POS), and will introduce the shard chains technique to unlock Ethereum’s full potential.

Proof of Stake

Instead of using computers as a node to be miners, users need to stake their ETH to become a validator and responsible for the same thing as miners in POW consensus. As the miners only have to stake 32 ETH to become a validator, POS comes with a number of improvements to the POW system: 1. better energy efficiency; 2. lower barriers to entry, reduce hardware requirements; 3. stronger immunity to centralization.

Shard Chains

Sharding is the process of splitting a database horizontally to spread the load, it will reduce Ethereum network congestion and increase tps by creating new chains. ETH 2.0 aims to increase 64 shard chains, and it may raise the speed from 15–20 tps to 100,000 tps, which significantly improving Ethereum’s scalability and capacity.

The Beacon Chain

The Beacon Chain is known as “Phase 0” on the Ethereum technical roadmaps, it’s a foundational component for ETH 2.0. Its first mission is to introduce POS to the Ethereum ecosystem, and also plays an important role as a coordinator. The Beacon Chain receives state information from 64 shard chains and makes it available for other shard chains, so that the network can stay in sync. The beacon chain will also manage the validators, from registering their stake deposits to issuing their rewards and penalties.

Conclusion

ETH 2.0 is a real game changer, the most obvious change is the speed of transactions per second, it’s about 10,000X of today’s tps. The raising of tps may allow more complex applications available in the real business world, we may see the entertainment industry like gaming and streaming, and even AI and IoT industry connecting with Ethereum in the future. At the same time, it provides a more secure, distributed and environmentally friendly way when using Ethereum blockchain.

Although it still has a long way to go, it may take 2 years or more to complete the whole upgrade process, “Phase 0” is one small step for ETH 2.0, one giant leap for the blockchain world.