Finance, trade, agriculture, and healthcare have all been disrupted as a result of blockchain technology. Bitcoin was the first widely used blockchain application, but since then, over 9,000 more cryptocurrencies have emerged. Ethereum is the largest general-purpose blockchain and has the second-highest market capitalization.
The goal of Bitcoin is to become a store of wealth and an inflation hedge that is simple and safe to send. Ethereum, on the other hand, was created with smart contracts and Dapps in mind (decentralized apps). Ethereum is fantastic; yet, it is far from perfect. The Ethereum Foundation has the capacity to enhance elements like performance and security, which it is doing with Ethereum 2.0.
Ethereum 2.0 vs. Ethereum Classic
Ethereum 2.0, also known as Eth2 or Serenity, is the first upgrade to the Ethereum Classic blockchain, with the goal of improving the Ethereum network’s speed, efficiency, and scalability while also improving security and making it more sustainable. Don’t worry if you already own ETH (or you are just starting to mine them with operating systems like simplemining.net); there’s nothing you need to do; the ETH 2.0 update is taking place behind the scenes, and holders should never notice the change.
Bottlenecks have been observed by Eth-1.0 users, and there is still a need to improve the number of potential transactions per second (currently 15 to 45). The following are the two key structural changes in Eth2:
- Proof of stake – this is a consensus method for Ethereum blockchain facilitators known as Validators who examine ongoing transactions rather than Ethereum Proof of Work miners. Validators are required to post a 32ETH bond in order to avoid fraud,
- Sharding – is the process of dividing a blockchain into shards (multiple blockchains). Sharding increases efficiency by allowing validators to keep track of their own Shard’s information. To avoid manipulation and increase security, validators will be swapped across shards, with communication between shards via the Beacon Chain.
ETH2.0 and Its Interaction
The Network’s infrastructure and maintenance are the responsibility of 128 Validators (referred to as a committee) on each Shard. They have signature and withdrawal keys, validating their position and the capacity to check the legality of each transaction; this procedure is known as “attesting.” The Validator Committee determines the blockchain’s legitimacy and timeliness. This committee proposes and validates each new shard block within a 12-second time limit called as a “slot.”
Eth 2.0 will contain 64 shards in its initial structure. As a result, each slot represents an opportunity for a shard Validator to add a block and obtain a reward. Each Shard has 64 shard blocks (one for each Shard) and one Beacon Chain block.
The ETH 2.0 upgrade will allow this helpful, global, decentralized smart contract system to move forward with its vision of speed, security, and reliability, while also lowering its carbon footprint and leveling the playing field for investors to have a democratic say in ETH’s future by staking their ETH.
Ethereum 2.0 is a much-needed improvement to the most extensively used blockchain network for smart contracts, Ethereum. The scalability of the Ethereum 2.0 network will definitely attract more users, making it the service of choice, as the acceptance of cryptocurrencies, smart contracts, Dapps, and NFTs continues to expand.