What is Eth 2.0? And the Roadmap to Serenity.
Intro
Criticism for ethereum has been mounting, over the past few years there has been a lot of critics saying “Ethereum is too slooow, it's downright broken at times.” Vitalik has been clapping, dancing and gathering his developers together to come up with the ultimate solution to this.
Economic Changes of ETH 2.0
I am gonna jump straight into the economic side of this first because of how some of us want to collect passive income off of Ethereum.
You can now in the future, once ETH 2.0 is launched, collect passive Ethereum over time by just running an ethereum validator node. You can do this by staking(lock it up) at least 32 ETH. If you have under 32 ETH you are not allowed to run a staking node. That is why everyone over the past two years has been accumulating just 32 ETH or a little bit more of that and you see wallets containing 32 ETH are increasing. So there are a lot of people ready anticipating this change and preparing for it.
Your node(computer) needs to stay online in order to vote and take part in the Ethereum Jury. If it stays offline, it’s gonna get penalized. So, in fact you are not just Earning ETH and keeping the interest but you are also doing a very valuable job to keep the network running. And that's the whole idea behind Proof of Stake (POS) Mechanism. You stake by performing useful actions on the network.
Ethereum Validators
Only sad part as of 8th June 2020 is that ETH 2.0 is on a test network. You can stake for free on the Ethereum Goerli Testnet and test out the whole process.
Right now the Ethereum network uses Proof of Work Mechanism to mine transaction blocks on its network, but as soon as we move to ETH 2.0, miners grading will start slowing from Proof of Work (PoW) to Proof of Stake (PoS). And the economic side is gonna fundamentally change.
Instead of miners getting rewarded, stakers will get rewarded and instead of people investing in video/ graphic cards, they are gonna start investing in Ethereum to gain that passive income.
So, does that mean we should through away our ethereum mining gear? What is the time scale for this?
Well actually, the time scale is not gonna be like a THANOS snap.
It’s actually gonna take quite a long time. In fact, it is gonna move through phases. There are gonna be three phases.
But being a programmer the Ethereum Team starts with Zero (0).
The Roadmap to Serenity
Phase 0: Beacon Chain
So currently what’s happening is that we are approaching Phase 0. So, whats Phase 0 is gonna bring along is the Beacon Chain. This is the primary objective of this Phase.
Now, this phase in terms of economics is very very interesting because to bring about the change from ETH 1.x to 2.0 you need these validators and need to stake Ethereum. And in order to do so, you need to make a conversion from ETH 1.x to ETH 2.0 and it is gonna be completely different. Because once you do that conversion to ETH 2.0, you will actually be able to convert back, but you are gonna gain one special benefit i.e. you are gonna be able to stake that ETH 2.0 and start earning every day a certain passive income for staking on the Ethereum 2.0 network.
And what will you earn? Of course, you will earn more ETH 2.0. So, this is a way of getting passive income from your ETH from the network.
Phase 1: Sharding
Now, moving on to Phase 1 is when things get very interesting.
If you think of Ethereum 1.x as a crystal. The Crystal of Ethereum, Ethereum 2.0 is going to smash that crystal into 64 different Shards.
Why do you want to do that?
Because ETH 2.0 shard will now have the ability to compute in parallel. You can almost think about it as 64x the power of Ethereum, but it is actually going to be beyond that. The shard is going to be more powerful and is going to be completely different from each other.
Sharding is something you can see in a lot of Databases.
You can see that the Sharding architecture is pretty much widespread adopted in the entire database space. But in the blockchain network, it is a little bit difficult to implement. More precisely, the reason being that if each shard operates differently, how would you transact between these Shards? And what guarantee do you have that people won’t try to exploit these shards to even duplicate items or new coins? And that is why it has been so hard taking more than 3 to 4 years of time for developers to come up with a solution to that.
So what will happen in Phase 1?
We are going to have cross-chain links and more computational power. This is going to be difficult for the developers as they will have to choose which shard to be on.
All the meanwhile you don’t have to worry about ethereum itself. The main chain which we are on right now is still going to run in parallel. So, everything that will happen will be in an isolated environment in the Beacon Chain and in the cross shards. It will be more of an experiment for the developers to try to fix things and not let them break. And it will not be affecting the operations of the main chain that is on the mainnet today, so we are still keeping them alive.
Phase 2: Combination and Improvements
Now, this is the phase where everything gets together. This is the blending pot of ideas. This is when the main chain that we are on, the Proof of Work chain is going to be merged into those Shards and become a whole again. And now Ethereum gets melded together to become the full power of Ethereum.
It’s almost like transformers coming together and forming an Ultra Megatron.
Migrating and becoming a Megatron is easy to say but hard to execute. So right now, it is still an open question as to “If all the ETH 1.0 contracts will be migrated to ETH 2.0” and are open up to debate.
Conclusion
So, right now what I see is that phase 2 will be up in 2 to 3 years and maybe out in the future. That is when everything will be subject to change at the time and uncertainty of miners come in. Because overall in Phase 0 and Phase 1, developers will be testing Proof of Stake to see if it is safer or rather if can be just as state as mining.
So this is when things get cloudy and Ethereum might want to keep some of that migrating infrastructure there but at the same time, there is definitely a huge push to migrate fully to Proof of Stake.
So managing expectations here, I do want to say that it might take more than the developers say.
My View on the Roadmap to Serenity
This is, of course, going to be one of the most ambitious projects going on to be on the live blockchain. This will change things fundamentally to its core and how the network reaches its consensus. And how the infrastructure and sever will be setup.
So there are definitely going to be a lot of hiccups along the way but I am definitely excited to see all of it going forward.
