Ethereum 2.0 or ETH 2.0 is an upgrade to the Ethereum network on numerous levels. What can you expect from the arrival of Ethereum 2.0?

If you are quite familiar with the crypto world, then you are probably aware of the popularity of Ethereum, the second-largest digital asset based on market capitalization after Bitcoin. However, the Ethereum network has been plagued by a variety of issues which include its scalability and high transaction fees.

ethereum 2.0

In early 2020, it was announced that the Ethereum network will be getting an upgrade known as Ethereum 2.0, which is expected to be a game-changer for the Ethereum blockchain. Presently, the upgrade is yet to be fully launched as it is being rolled out gradually.

Many Ethereum investors and cryptocurrency enthusiasts were left wondering what will happen once the upgrade is completely implemented. If you are among them, don't feel panic yet as this article will be addressing the expected consequences of the launch.

 

What is Ethereum 2.0?

Ethereum 2.0 is a series of interlinked upgrades to the Ethereum network to improve the efficiency, speed, and scalability of the network. It can process more transactions and provide an ultimate solution to some of the inherent challenges of the network.

The upgrade was launched in 2020 and is expected to be delivered in three main phases: phase 0, phase 1, and phase 2. Phase 0 is the first phase and has already been launched in 2020. The remaining phases are expected to be gradually rolled out before ETH 2.0, which will finally launch in the second quarter of this year.

 

Differences between Ethereum 1.0 and Ethereum 2.0

There are two major differences between ETH 1.0 and ETH 2.0:

  1. The consensus mechanism utilized in the two Ethereum versions,
  2. and the presence of Shard Chains.

The consensus mechanism used in ETH 1.0 is Proof of Work (PoW) while ETH 2.0 will be utilizing Proof of Stake (PoS) since it holds certain advantages over PoW such as better security, energy efficiency, and scalability.

The second difference is the presence of Shard Chains or sharding found in ETH 2.0, which causes complex data to be divided among numerous nodes and processed simultaneously instead of consecutively. This will hopefully lead to quicker transactions throughout the Ethereum network.

 

Phases of the Upgrade

As mentioned earlier, the Ethereum 2.0 upgrade will be rolled out in three phases. The first phase known as Phase 0 was launched in December 2020 featuring the implementation of the Beacon chain and the introduction of the PoS mechanism alongside the previously used PoW.

The second phase known as Phase 1 was launched in the second quarter of 2021 and featured the merging of the Ethereum mainnet with the Beacon Chain while also bringing an end to the use of PoW. Users who staked their Ethereum on the Beacon Chain were assigned the roles of validators in this phase.

The third and final phase is Phase 2 which will feature the introduction of Shard Chains to the network. This will complete the launch of the Ethereum 2.0 upgrade.

 

Expected Results Ethereum 2.0 Launch

When the new Ethereum 2.0 upgrade is fully launched, traders and investors can expect the following positive results:

  1. Improved energy efficiency: since PoS will be replacing PoW, Ethereum will become 99.9% more energy-efficient. Also, the addition of new blocks to the Ethereum blockchain will no longer consume a lot of energy.
  2. Increased number of validators and more decentralization: the introduction of sharding will further decentralize the Ethereum network. This will lessen the technical barriers for any individual that is interested in contributing to the security of the network. Sharding will also enable ordinary people to operate Ethereum on their personal devices, thus leading to the introduction of additional validators to the network.
  3. Improved security: this is one of the main benefits that Ethereum users will enjoy. The upgrade will make it more difficult to harm the network. With PoS, attacks tend to be more expensive and since validators will have to submit their addresses, it will be easier to identify any attacker and eject them quickly from the network.
  4. Higher speed of transaction: with the introduction of sharding, more transactions will be processed per second which will lead to a reduction of transaction costs. A combination of these benefits can together stimulate more DeFi transactions on the Ethereum network.

The launch date of ETH 2.0 was originally planned for 2019 but was eventually pushed back to June 2022 to consolidate code and tighten the network against malicious attacks. When compared to Bitcoin, Ethereum is considered quite advanced, and the birth of ETH 2.0 is predicted to make crypto more scalable, safer, and more sustainable.