What is Ethereum 2.0?
Qasim Noman
Data Analytics | Business Analyst | Data Studio | Power BI | Azure | Financial Analyst | Coffee Planet - Manager Operations | Fintech
Ethereum 2.0, also known as Eth2 or “Serenity,” is an upgrade to the Ethereum blockchain. The upgrade aims to enhance the speed, efficiency, and scalability of the Ethereum network so that it can avoid bottlenecks and process more transactions simultaneously.
But Ethereum 2.0 also doesn't really exist—in January 2022, the Ethereum Foundation?said?it would stop referring to the upgrade as Ethereum 2.0. The rebrand is intended to reflect the fact that what's happening is a network upgrade rather than the launch of a new network. Accordingly, Eth1 is now known as the "execution layer," where smart contracts and network rules reside, while Eth2 is referred to as the "consensus layer," which ensures that devices contributing to the network are acting in accordance with its rules.
How does Ethereum 2.0 differ from Ethereum?
While Ethereum 1.0 uses a consensus mechanism known as proof-of-work (PoW), Ethereum 2.0 will use a proof-of-stake (PoS) mechanism.
Proof of stake means that, instead of relying on miners, individual users can stake a network’s native cryptocurrency and become validators. Validators are similar to miners in that they verify transactions and ensure the network isn’t processing fraudulent transactions.
These validators are selected based on how much crypto they have staked, and how long they’ve staked it for.
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How will Ethereum 2.0 scale better than Ethereum 1.0?
One of the main reasons for the upgrade is scalability.
The current Ethereum network can only support around 30 transactions per second; this causes delays and congestion. Ethereum 2.0 promises up to?100,000 transactions per second. This increase will be achieved through the implementation of shard chains.
How will Ethereum 2.0 be more secure?
Ethereum 2.0 has been devised with?security?in mind. Most PoS networks have a small set of validators, which makes for a more centralized system and decreased network security. Ethereum 2.0 requires a minimum of 16,384 validators, making it much more decentralized and hence, secure.