Well , we all have already witnessed the surge in ethereum in past few months . And it's no surprise that it will surprise us even more in the future . Ethereum 2.0 will be there in few months from now and its already affecting the technology and the market .
Before going into ethereum v2 let's first take a look at ethereum v1 : Ethereum is a technology that lets you send cryptocurrency to anyone for a small fee. It also powers applications that everyone can use and no one can take down.
It's the world's programmable blockchain.
Ethereum builds on Bitcoin's innovation, with some big differences. Both let you use digital money without payment providers or banks. But Ethereum is programmable, so you can also use it for lots of different digital assets – even Bitcoin!
This also means Ethereum is for more than payments. It's a marketplace of financial services, games and apps that can't steal your data or censor you .
Ethereum has led to the creation of new products and services that can improve different areas of our lives.
It is still in the early stages but there's lot to be excited about !
Some example or use cases are like ,
Non-fungible tokens (NFTs) : A way to represent unique items as Ethereum assets that can be traded, used as proof of ownership, and create new opportunities for creators.
Decentralized autonomous organisations (DAOs) : A new way to collaborate and set up online communities with shared goals and pooled funds.
these are some of the use cases of ethereum and many more yet to be discovered .
Now let's take a look at how and why ethereum 2.0 will be a big turning point or big thing for ethereum and blockchain community.
Eth2 refers to a set of interconnected upgrades that will make Ethereum more scalable, more secure, and more sustainable. These upgrades are being built by multiple teams from across the Ethereum ecosystem. well here goes the typical definition like thing but,
The Ethereum protocol that launched in 2015 has had incredible success. But the Ethereum community always expected that a few key upgrades would be necessary to unlock Ethereum's full potential.
High demand is driving up transaction fees that make Ethereum expensive for the average user. The disk space needed to run an Ethereum client is growing at a fast rate. And the underlying proof-of-work consensus algorithm that keeps Ethereum secure and decentralized has a big environmental impact. What is commonly referred to as Eth2 is a set of upgrades that address these problems and more. This set of upgrades was originally called 'Serenity', and they've been an active area of research and development since 2014. Now that we have understand what is Eth2 and why we need it things might have cleared a bit by now how will it change the ethereum and blochchain world . It's not an easy task , let's take a little look at
A naive way to solve Ethereum's problems would be to make it more centralized. But decentralization is too important. It’s decentralization that gives Ethereum censorship resistance, openness, data privacy and near-unbreakable security.
Ethereum’s vision is to be more scalable and secure, but also to remain decentralized. Achieving these 3 qualities is a problem known as the scalability trilemma.
The Eth2 upgrades aim to solve the trilemma but there are significant challenges.
Ethereum needs to be able to handle more transactions per second without increasing the size of the nodes in the network. Nodes are vital network participants who store and run the blockchain. Increasing node size isn't practical because only those with powerful and expensive computers could do it. To scale, Ethereum needs more transactions per second, coupled with more nodes. More nodes means more security.
The shard chains upgrade will spread the load of the network into 64 new chains. This will give Ethereum room to breathe by reducing congestion and improving speeds beyond the current 15-45 transactions per second limit. More on shard chains
And even though there will be more chains, this will actually require less work from validators - the maintainers of the network. Validators will only need to 'run' their shard and not the entire Ethereum chain. This makes nodes more lightweight, allowing Ethereum to scale and remain decentralized.
The Eth2 upgrades improve Ethereum's security against coordinated attacks, like a 51% attack. This is a type of attack where if someone controls the majority of the network they can force through fraudulent changes.
The transition to proof-of-stake means that the Ethereum protocol has greater disincentives against attack. This is because in proof-of-stake, the validators who secure the network must stake significant amounts of ETH into the protocol. If they try and attack the network, the protocol can automatically destroy their ETH.
This isn't possible in proof-of-work, where the best a protocol can do is force entities who secure the network (the miners) to lose mining rewards they would have otherwise earned. To achieve the equivalent effect in proof-of-work, the protocol would have to be able to destroy all of a miner's equipment if they try and cheat.
Ethereum's security model also needs to change because of the introduction of shard chains. The Beacon Chain will randomly assign validators to different shards - this makes it virtually impossible for validators to ever collude by attacking a specific shard. Sharding isn't as secure on a proof-of-work blockchain, because miners can't be controlled by the protocol in this way.
Staking also means you don’t need to invest in elite hardware to 'run' an Ethereum node. This should encourage more people to become a validator, increasing the network’s decentralization and decreasing the attack surface area.
Ethereum needs to be greener. It's no secret that Ethereum and other blockchains like Bitcoin are energy intensive because of mining. More on mining
But Ethereum is moving towards being secured by ETH, not computing power – via staking. More on staking
Although staking will be introduced by the Beacon Chain, the Ethereum we use today will run in parallel for a period of time, before it 'merges' or 'docks' with the Eth2 upgrades. One system secured by ETH, the other by computing power. This is because, at first, shard chains won't be able to handle things like our accounts or dapps. So we can't just forget about mining and mainnet.
Once the beacon chain and the shard chain upgrades are up and running, work will begin on docking mainnet with the new system. This will turn mainnet into a shard so that it’s secured by ETH and far less energy intensive.
As of now ethereum 2.0 is in 0 phase now indicates that all the problems for conversion to eth2 has been tackles , big applaud to Ethereum team for their hard work and biggest contribution to blockchain world .
With all these point , we can clearly see that Ethereum 2.0 is a big deal !