What Is Ethereum 2.0
Ethereum 2.0, also known as Eth2 or “Serenity”, is an upgrade to the Ethereum blockchain. The upgrade aims to enhance the speed, efficiency, and scalability of the Ethereum network so that it can process more transactions and ease bottlenecks.
Ethereum 2.0 is launching in several phases, with the first upgrade expected to launch towards the end of 2020.
How does Ethereum 2.0 differ from Ethereum?
While Ethereum 1.0 uses a consensus mechanism known as proof of work (PoW), Ethereum 2.0 will use a proof of stake (PoS) mechanism.
How does proof of stake differ from proof of work?
With blockchains such as Ethereum, there is a need to validate transactions in a decentralized way. Ethereum, like other cryptocurrencies, currently uses a consensus mechanism known as proof of work (PoW).
In this system, miners use computer hardware processing power to solve complex mathematical puzzles and verify new transactions. The first miner to solve a puzzle adds a new transaction to the record of all transactions that make up the blockchain. They are then rewarded with cryptocoins. However, this process can be energy-intensive.
Proof of stake (PoS) differs in that instead of miners, transaction validators stake crypto for the right to verify a transaction. These validators are selected to propose a block based on how much crypto they hold, and how long they’ve held it for.
Other validators can then attest that they have seen a block. When there are enough attestations, a block can be added to the blockchain. Validators then are rewarded for the successful block proposition. This process is known as “forging” or “minting”.
The main advantage of PoS is that it is far more energy-efficient than PoW, as it decouples energy-intensive computer processing from the consensus algorithm. It also means that you don’t need a lot of computing power to secure the blockchain.
How will Ethereum 2.0 scale better than Ethereum 1.0?
One of the main reasons for the upgrade to Ethereum 2.0 is scalability. With Ethereum 1.0, the network can only support around 30 transactions per second; this causes delays and congestion. Ethereum 2.0 promises up to 100,000 transactions per second. This increase will be achieved through the implementation of shard chains.
How will Ethereum 2.0 be more secure?
Ethereum 2.0 has been devised with security in mind. Most proof of stake networks have a small set of validators, which makes for a more centralized system and decreased network security. Ethereum 2.0 requires a minimum of 16,384 validators, making it much more decentralized—and hence, secure.
However, according to Lior Yaffe, co-founder of Jelurida and lead core developer of the Ardor and Nxt blockchains, there is a potential vulnerability that focuses on the level of participation rates in the network.
Security audits of Ethereum 2.0 code are being carried out by organizations including blockchain security firm Least Authority.
The Ethereum Foundation is setting up a dedicated security team for Ethereum 2.0 to research possible cybersecurity problems in the cryptocurrency. In a tweet, Ethereum 2.0 researcher Justin Drake stated that the research will include “fuzzing, bounty hunting, pager duty, cryptoeconomic modelling, applied cryptanalysis, formal verification”.
How is the Ethereum 2.0 upgrade going to take place?
Following a series of testnet launches, Topaz, Medalla, Spadina and Zinken, the full roll-out of Ethereum 2.0 will take place in three phases: Phase 0, 1, and 2 (developers like to count from zero). Phase 0 launched on December 1, 2020, with the other phases set to arrive in the following years.
Phase 0 sees the implementation of the Beacon Chain; this stores and manages the registry of validators as well as deploying the proof of stake (PoS) consensus mechanism for Ethereum 2.0. The original Ethereum PoW chain will run alongside this so there is no break in data continuity.
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