ETH 2.0 (Part 2)
Welcome back to our ETH 2.0 series, Part 2.
Previously in Part 1 we talked about how ETH came to play and the previous updates or phases that was before ETH 2.0, or Serenity. In this post, we’ll be talking about ETH 2.0 and what “upgrades” it comes with.
The upgrades involved in ETH 2.0 are Proof-of-Stake (Beacon Chain, Casper FFG), Sharding, eWASM, Plasma, Raiden and more.
Current Issues with ETH
The major issue ETH has currently is in regards to Scalability. Scalability is needed to support hundreds of decentralized applications (DApps) and the need to process high numbers of transactions per seconds. The more DApps and more transactions means increase in time and cost which also means slower and becomes less convenience to use. This issue goes against what Ethereum plans on becoming. The current speed that Ethereum can process for transactions are 20 per second, some say it is between 12–45 transactions per second. Nevertheless, this may seem okay if you compare it to the rate transactions are being processed by Bitcoin, however, centralized networks such as Paypal and Visa are processing 193 and 1667 transactions respectively. Scalability is central to the development of ETH 2.0. To overcome this issue, they will be using Sharding. Sharding will be use to resolve the bottleneck Ethereum is currently facing.
Sharding is a procedure of storing and storing a single dataset into multiple database. By dispensing the data among multiple things, the cluster can store larger datasets and could handle additional request. This comes in handy for those datasets that are too large to be kept in one single database.
The next issue that Ethereum is facing is Efficiency and Environment Sustainability. Ethereum relies on Proof-of-Work (PoW) consensus protocol to ensure the security of its network. PoW is where multiple miners who owns computer hardware connected to the blockchain network. Miners are then rewarded for their efforts. The first miner to complete and verify a transaction, will be given the reward. PoW procedure of verifying the transaction into a block is a simple and fast process but PoW needs huge amounts of computational power and electricity. ETH 2.0 will transition from Proof-of-Work to Proof-of-Stake (PoS) called Casper. This is change of consensus is significant because the difficulty bomb mining adjustment that was introduced by the Byzazntium update where it makes it harder to mine.
Next, Speed and Usability. As mentioned above in Scalability, it causes Ethereum to become slow and inconvenient to use. EVM is to fix the internal and computation issue of Ethereum. Here is where Ethereum Virtual Machine (EVM) comes around where it execute codes and allows for the function to work correctly such as account information, balances, current gas price, addresses and block information. All the smart contractswritten in Solidity/Vyper and comploed into unique bytecodes executed are dealt with by the Virtual Machine.
So to sum it all up, ETH 2.0 are fixing the issues of Scalability, Efficiency and Environment Sustainability and Speed and Usability.
ETH 2.0
ETH 2.0 will be executed in 4 phases. The first phase is called Phase 0.
Phase 0
It will be launching the beacon chain where they will implement Proof-of-Stake and be managing a registry of validators which will be attesting blocks into existence on ETH 2.0. Before the beacon chain can launch its genesis block, 524,288 ETH atleast, must be stake on the network and are divided between a minimum of 16,384 validators. The number of validators were decided to ensure there are enough security and decentralization. Unlike normal times, staking rewards are not given until the threshold is met and why a selfless act is needed from the early participants during Phase 0. For the greater good. So what happens to the current PoW as we all know? Well, when PoS is implemented, it will go through a testing phase as a live functioning network before DApps and users start transacting millions on a daily basis, this is by design. PoW will continue to exist in parallel and even receive upgrades. The beacon chain is not able to process transactions, execute smart contracts or even host DApps. Hence why it will be going through a testing phase.
Phase 1.
The launch date is still unknown but people are expecting it to be released a year after the beacon chain is launched. This is where the issue of scalability will be fixed. Sharding addresses scalability by separating into small database while still allowing for multiple transactions to be process simultaneously. Currently only 1 consecutive block at a time which slows down the process.
Phase 1.5
This is an important moment as it will be merging the original PoW with the new PoS chain. This is where the PoW Ethereum blockchain will be brought into ETH 2.0 and exist as one of the chains alongside beacon chain. It will not break the data history or continuity. ETH holders will not have to go through any sort of transfers or swaps of token betwen ETH 1.0 and ETH 2.0 but they can use their ETH on the ETH 2.0 with no extra work on their end or have the risk of their current ETH becoming outdated. If the PoW still exist, will PoW consensus mechanism be used still? no it would not. The mechanism that creates PoW will not be needed to maintained and it will operate as another PoS on the ETH 2.0.
Although all other Phase are defined, Phase 2 sadly has not. However, with the new “upgrades” in the previous phases such as Proof-of-Stake and Sharding, it is rumored that Phase 2 will bring about more exciting upgrades to the Ethereum network.
To end this ETH 2.O Part 2, ETH 2.0 has been a long time coming for the community. ETH 2.0 opens the doors for new opportunities and makes it closer for Ethereum to reach their goal.
