Friday, January 28

What is Ethereum 2.0? Everything you need to know about this blockhain

Ethereum 2.0 is the update that will allow the popular blockchain to compete with the new blockchains in terms of performance and sustainability. The initial idea was to implement the update throughout 2022, but a new statement from its co-founder, Vitalik Buterin, seems to indicate that we will have to wait until 2023 for this update to take effect. The high demand for the network, caused by the spectacular development of DeFi, dApps and NFTs has placed this blockchain at the limit of its capabilities this year. A situation that has caused more and more users and companies to use alternatives such as Polygon (MATIC) or Solana.

What is Ethereum 2.0

Ethereum 2.0 is the update that promises to transform this blockchain into a much lighter, faster, sustainable, scalable and accessible network. The update, also known as Serenity, will replace the current Proof of Work (PoW) mining with Proof of Stake (PoS). A change that will eliminate the high electricity consumption required for the operation of mining, as well as increase the capacity of transaction processing.

Ethereum, five years putting the decentralized heart of Bitcoin into practice

Another important change that Ethereum 2.0 will introduce will be the fragmentation of the blockchain into smaller chains. These chains will work independently and will allow going from the current 12 or 20 transactions per second to more than 100,000 transactions per second. This exponential increase in scalability will reduce network fees to a minimum, making Ethereum a competitive blockchain.

What phase is Ethereum in?

Currently, Ethereum is already on the Beacon Chain network, the chain on which Ethereum 2.0 will run. In fact, on October 27, the first update of the Beacon Chain, known as Altair, was launched. This update enables developers to provide support for creating thin clients, as well as make changes to the penalty scheme and streamline the transfer process. That is, Altair prepares the network for the merger of the current Ethereum mainnet with the proof-of-stake system, which is built on the Beacon Chain beacon chain. At present, the PoS network is developed in parallel with the Ethereum network in PoW, protected by miners.

The Beacon Chain is also known as Phase 0 of Ethereum 2.0. It is a blockchain designed to implement and test all the changes required to transition from Ethereum from PoW to PoS. Successfully tested implementations within this network will move onto the Ethereum 2.0 mainnet, as happened with Altair.

When will Ethereum 2.0 be released?

In a commemorative Tweet of the launch of the Beacon Chain, the co-founder Buterin published last day 2 the roadmap of the Blockchain. The post compiles some of the progress made so far by the network, but suggests that the upgrade to Ethereum 2.0 would not arrive before 2023.

Although there is no doubt that the update could be a turning point for Ethereum and the entire blockchain ecosystem, the technical challenges are enormous and a mistake in its implementation could significantly devalue the price of the cryptocurrency. Therefore, both Vitalik and the developer team want to be very cautious and will not release Ethereum 2.0 to the main network until they are 100% sure of its correct operation.

Ethereum’s main competitors

The Ethereum network has been experiencing scalability problems since the ICO boom in 2017. Problems that have multiplied with the arrival of NFTs and Decentralized Finance (DeFi). This is why there are more and more alternative blockchains that solve many of Ethereum’s current problems.

One of these blockchains is Polygon. This protocol works through a sidechain (side chain) that connects to the Ethereum network, allowing further processing of the Blockchain. That is, it is a protocol that allows increasing the scalability of the Ethereum Blockchain and adding new use cases. In fact, it could be said that Polygon is everything Ethereum claims to be with Ethereum 2.0. Likewise, Polygon can be compared to other similar blockchains, such as Avalanche (AVAX) and Polkadot (DOT).

EY partners with Polygon to deliver blockchain solutions to businesses

Another of Ethereum’s competing blockchains, especially in terms of decentralized application development (dApps) and NFTs, is Solana. The Solana blockchain is one of the fastest blockchains in the world, allowing the easy development of fully scalable applications. In just 6 months, the market capitalization of the cryptocurrency of this project (SOL) has been placed only behind Bitcoin, Ethereum, BNB and Tether.

You can also follow us on our channels Telegram and Twitter