Ethereum 2.0 to go live next month: Everything you need to know about the next-gen blockchain
Ethereum 2.0 will see the blockchain go from a Proof-of-Work (PoW) model to a Proof-of-Stake (PoS) model.
The next generation of Ethereum blockchain is going to go live on December 1 after being in the works for years. It was supposed to go live on January 3 next year, but it looks like it's good to go.
Ethereum 2.0 will see the blockchain go from a Proof-of-Work (PoW) model to a Proof-of-Stake (PoS) model where participants can “tie their cryptocurrency to the network as collateral”, explained TechRadar.
As per the announcement, the launch of Ethereum 2.0 to “take effect”, 16,384 validators will need to stake a minimum of 32 ether which is worth $12,800 at per current market rates. Staking ether means that cryptocurrency will underpin the network.
Once that minimum amount has been staked, that will trigger the launch of Beacon Chain (the infrastructure that will facilitate the switch) in the Ethereum 2.0 genesis event.
“We've hardened Ethereum 2.0 as much as we can with simulated test environments, formal verifications and audits,” said Joe Lubin, Ethereum co-founder and CEO at ConsenSys.
“We are incredibly excited to see the community galvanize around the first phase of Eth2, now with real value at stake,” Lubin added.
Ethereum 2.0 will be rolling out in phases over the next few months and the launch of the Beacon Chain is the vital first step that gets the ball rolling.
So what changes in Ethereum 2.0?
The most important change, as per reports, is that the consensus mechanism underpinning the Ethereum blockchain will transition from PoW to PoS as we told you earlier. This is generally considered to be more effective and energy-efficient when it comes to maintaining the network.
To better understand it, in a PoW system, “one unit of computational power equates to one unit of mining power”. In PoS one unit of value secures one unit of mining power for the validator.
Both the PoW and PoS systems are designed to incentivise the network maintenance while ensuring that the data on the blockchain is tamper-proof.
Also Read: Rise of altcoins and other smaller rivals throws up fresh challenge to bitcoin
The second big change is the introduction of Ethereum network sharding that is going to happen at a later phase. Sharding means that only a portion of the nodes need to validate any given transaction (instead of all of them) and this increases the network's throughput drastically.
Ethereum has faced flack in the past for “lacking the scalability that would allow it to compete with legacy systems”. For example - Visa is thought to process roughly 1,700 transactions per second (TPS), whereas Ethereum 1.0 can only manage a meager 25 TPS, according to reports.
By effectively dividing the network into lanes the maximum number of TPS processed by Ethereum 2.0 can be increased by magnitudes.
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