ETHEREUM 2.0: EVERYTHING YOU NEED TO KNOW
Ethereum 2.0 is the potential update to Ethereum to make it faster and better. Potential updates deal with the current scaling issues, issues with mining, to make transactions faster and create a better environment for smart contracts and more. Ethereum’s launch was initially planned to be in four stages back when it launched in 2015. They are:
Now we are on the third stage of Ethereum “Metropolis”. Metropolis consists of two phases, Byzantium and Constantinople. The next system wide upgrade for the Ethereum network called as Constantinople is nearing. The activation of Constantinople is expected to take place at block number #7280000. This upgrade is also known as New Ethereum software version 3.5. The next stage is Serenity also known as Ethereum 2.0.
Need for Updates and Solutions
There are some problems in the current version of Ethereum which is to be solved. Some of the fundamental and current problems with Ethereum are scalability, security, slow mining process and high energy consumption. Ethereum 2.0 “Serenity” plans to overcome these problems through its solutions. Some of them are
Proof of Stake (PoS)
Vitalik Buterin, inventor and co-founder of Ethereum admits that Ethereum mining now roughly consumes as much energy as Iceland consumes. Thus, to sustain its competitive advantage, Ethereum is aiming to reduce its energy consumption by scraping its blockchain based on proof-of-work (PoW) and build an entirely new blockchain based on the proof-of-stake (PoS) algorithm. Vitalik also says that Ethereum 2.0 should complete transaction using 1% of energy consumed today when PoW is replaced with PoS.
Ethereum 2.0 will move towards Beacon Chain. One main thing the Beacon Chain was designed is to manage the new feature for Ethereum scaling called “sharding”. Sharding will split the network into independent groups of nodes called shards. As the nodes are split into shards, the nodes only need to handle the fraction of the total system load. This will split the network load so that the main network will not have to bear the load of all transactions. Sharding gives the ability to process thousands of transactions per second rather than the current 15 or so transactions per second. This reduces the transaction time and will speed up the process.
Ethereum 2.0 is also focusing on the security, which means that it will be harder for the attackers to make the network behave in unexpected ways. Ethereum 2.0 will have large number of available validators and this has the following advantages in it. First, a large validation pool allows more opportunity for decentralisation and this makes attack less likely to happen and more difficult. Second, if something that violates the protocol occurs, it means that many validators must have disobeyed the rules. This behaviour is detectable, and the misbehaving group will be penalised by having all their stakes wiped out. And there are some more security aspects too. All these will make Serenity more secure than Ethereum 1.0.
The Road Ahead
The next system wide upgrade is Ethereum version 3.5 also known as Constantinople. It is expected on the end of February 2019. After this there are two more updates which will happen before Serenity. One is Casper Proof of Stake and Hybrid PoW / PoS. Then comes the Beacon chain and sharding. If the Ethereum project successfully implements these upgrades, then Serenity comes next. Serenity is an upcoming major upgrade that creates a Proof-of-Stake chain that combines many of the above ideas (PoS, sharding, etc) into a new chain that would be fully compatible with the existing Proof-of-Work chain. Serenity will run on a pure Proof of Stake consensus protocol. This scaling and mining solution would not only partly change the way Ethereum is mined but also will make way to allow the network to do faster transactions and thus would create a better environment for smart contracts and Decentralised applications. In theory, Serenity could increase scalability by as much as 1000 times than Ethereum 1.0.