Any Bitcoin or cryptocurrency lover in general surely know that there will be a new version of Ethereum called Ethereum 2.0 that’s supposedly coming this year. But up to this point, there’s still no solid evidence that it will truly be released this year. But in the meantime, there are other questions that people ask such as:
But what is Ethereum 2.0? And why is it a big deal compared to its predecessor? Well, let’s jump right into it then. Here’s everything you need to know about Ethereum 2.0:
What is Ethereum 2.0
Ethereum 2.0 or sometimes called Eth2 and “Serenity” is an upgrade of the Ethereum blockchain. This update is aimed to increase the speed, efficiency and Ethereum’s network scalability, making it able to process much more transactions while also simultaneously reducing traffic.
The Differences Between Ethereum 2.0 And Ethereum 1.0
Ethereum 1.0 as it currently stands employs the consensus mechanism of proof of work or PoW. Ethereum 2.0 meanwhile will supposedly use proof of stake instead.
In an PoW system, miners use their hardware computing capability to solve complicated math problems and then verifying it as a new transaction. The first miner to solve said problem will then add a new transaction into the log that as a whole makes up the blockchain network. And finally receives a reward. But a side effect of this process is that it requires a lot of power.
It’s inefficient. But proof of stake on the other hand uses transaction validator that stakes their crypto for the right to verify a transaction. This validator is chosen to propose blockage based on how many crypto they possess and how long they have said crypto.
Other validators will then be able to proof that they were able to see a block. And if there’s enough validation, the block will then be added into the blockchain. After that they will get a reward for every successful block proposal. This process itself is called forging, or minting.
The main benefit of proof of stake as a system is that it’s way more efficient in terms of energy compared to proof of work based systems. This is because proof of work separates the intense computing process from the consensus algorithm. Not only that, but this also means that you need way less computing power to secure your blockchain.
Why Ethereum 2.0 is Better than Ethereum 1.0
The biggest reason why Ethereum 2.0 is better than Ethereum 1.0 is its scalability. While Ethereum 1.0 only supports 30 transactions every second, making it to be swarmed with traffic, Ethereum 2.0 promises to be able to handle up to 100.000 transactions every second.
And from a security point of view, Ethereum 2.0 is built by taking security into account as one of its main improvements. Most of proof of stake networks only has a handful of validators in them, and as such resulting in a more centralized system, making it a less secure network.
Thankfully, Ethereum 2.0 requires at least 16.384 validators in a network, making it way more secure and decentralized.
With that concludes our article about Ethereum 2.0, what it is, how it differs from its predecessor, and why it’s an important step in the right direction for cryptocurrency future. That’s all from us, we hope you find this article useful and we hope to see you again in another one.