Ethereum is the most popular smart contract platform and the second-largest cryptocurrency worldwide. The further development of the network is one of the most exciting topics in the crypto world. Because despite its size and influence, Ethereum has some problems to solve. Ethereum 2.0 update is to be created.
Ethereum has had problems with high transaction fees, scalability, and in some cases, the security of the network for years. The conversion to Ethereum 2.0 should remedy this. We present Ethereum 2.0 and tell how far the development is in the transition.
What is Ethereum?
Ethereum is the second-largest cryptocurrency after Bitcoin. The network was founded in 2015 by Vitalik Buterin. With Ethereum, he wanted to create a platform for decentralized, collaborative applications. The network uses the native token Ether (ETH) for transactions. Due to the growth of the Ethereum network, the value of the Ether token has increased massively in recent years.
Ethereum is characterized by its smart contract functions, which provide the basis for decentralized applications (dApps) on the Ethereum blockchain. Ethereum pioneered smart contracts, making it the blockchain of choice for developers of decentralized applications for years.
What are Ethereum problems?
Ethereum changed the crypto world with the introduction of smart contracts. But the blockchain also has to contend with some problems. Ethereum relied on the Proof-of-Work consensus mechanism. In this article, you will learn more about it. To sum up, Proof of Work has the disadvantage that as the network grows, transaction speeds decrease and transaction fees increase.
Ethereum has struggled with rising gas fees in recent years. Over time, the high fees made the blockchain less attractive for developers of decentralized applications. New blockchains such as Cardano, Solana, or Avalanche rely on the proof-of-stake consensus mechanism and are therefore much more scalable. Furthermore, the security on the Ethereum was good, but not excellent.
What should Ethereum 2.0 Update improve?
Ethereum had to address the problems in order not to fall behind the modern blockchains. Due to its pioneering position in smart contracts, Ethereum continues to be a leader in NFTs and DeFi. However, blockchains such as Solana and Terra are massive competitors of the Ethereum blockchain.
In addition to other small improvements, Ethereum 2.0 has one important task in particular: the switch from Proof of Work to Proof of Stake. This conversion has taken place over the last few months through various upgrades that Proof of Stake was to introduce step by step.
What are the phases of Ethereum 2.0?
There are roughly 3 phases in the development of Ethereum 2.0:
- Phase 0: Ethereum developed the so-called Beacon Chain , which is completely based on the Proof-of-Stake consensus mechanism.
- Phase 1: So-called shard chains initiated. These are separate blockchains organized via the Beacon Chain.
- Phase 2: The old Ethereum 1 Chain is connected to the new Beacon Chain (Ethereum 2.0 ) .
When will Ethereum 2.0 be ready?
According to Ethereum, the launch of Ethereum 2.0 should take place in the second quarter of 2022, in June to be precise. At the moment the developers are only working on the last step, merging the beacon chain with the old Ethereum chain. At the end of this process, Proof of Work should be a thing of the past. In addition, the new blockchain should be safer, faster, and more scalable.
At the moment the development team is trying to replicate bugs in the testnet. However, the disturbances in the test net are probably of a minor nature, so the launch in June 2022 should not be at risk. A successful launch could give the Ether course a huge boost in the second and third quarters.When is Ethereum 2.0 coming? – 2022 update on the Development State