ETH 2.0 : Ethereum’s big move
Ethereum 2.0 promises to be the biggest change to Ethereum yet. With Proof-Of-Stake, more transactions per second, and better security.
Whole new consensus
The biggest change coming to ETH is the change from Proof-of-Work to Proof-Of-Stake.
Though the groundwork for this new consensus has already been laid and staking has been started on the testnet, the change is yet to come to the mainnet.
PoS is essential for Ethereum’s growth as environmental concerns grips crypto especially after Elon Musk’s tweet which caused a significant drop in crypto markets. After PoS goes live, ETH’s energy demand is estimated to go down 99% as miners turn into validators and mining pools turn into staking pools.
Though 51% attacks will still be possible in staking, the fact that someone will be willing to stake that much of ETH is highly unlikely. Also, such a person would by no means WANT the network to become useless nonetheless.
EIP 1559
As of writing this article EIP 1559(Ethereum Improvement Proposal 1559) is slated to go live in the London hard fork. However the update has gone live on the Ropsten Testnet.
EIP1559 will remove the current fee structure by removing the gas fees with a system of base fee and an optional inclusion fee, the former of which will be burned(removed from circulation) and the latter will be transferred to miners as a incentive to prioritize the transaction.
This will solve the problem of high gas fees and will also add a deflationary mechanism to the blockchain, which is necessary as staking attacks depend on the scarcity of an asset.
Shard of hope
Scaling has been a major problem on the Ethereum network, with speed around 2,000 transactions per second and high gas fees make transactions expensive and slow.
ETH 2.0 brings sharding to the table, effectively making the blockchain into multiple small pieces, which would allow the blockchain to run on small devices and phones, increasing its decentralization and increasing the transactions per second that can be carried.
Current estimates range from 10,000 to more than 100,000 transactions per second(TPS) being executed on the network after sharding is introduced.
Not to mention the increased security as the computing power will become much more decentralized that ever before
This is indeed necessary, as the cryptocurrency increasingly looks to expand to real world applications.
Layers of Success
Sharding was earlier intended to come before staking as developers focused to increase the TPS however layer 2 solutions made it possible to conduct transactions at a fraction of cost compared to the conducting the transactions on the main chain,
One of the most promising Layer 2 solutions is Polygon(Previously known as the Matic Network) which has see transactions soaring and had reached an all time high of 2.7$ on May 18th.
These high transactions volumes have also benefitted many DEXs(Decentralized Exchanges) and DeFi as lower transaction fees allow users with small holding to easily interact in the ETH ecosystem.
Ending Thoughts
ETH 2.0 promises considerable changes to make ETH much more sustainable, scalable, decentralized and secure. Many of these changes seem promising yet they still bring along many challenges.
While the community is open to the changes being bough by the Ethereum Foundation it remains to be seem how successful these changes are, although staking and sharding seem a step in the right direction.
