Everything you need to know about ETH 2.0❗

[Bitcasino.io 462]

 

Greetings 🙂 

In 2015, Vitalik Buterin introduced an altcoin that changed the crypto sphere: ETHEREUM. 
It stands as the second most popular digital asset in the world with a unique blockchain technology that can be used to develop smart contracts and decentralized applications. Now five years later, Ethereum is updated, more improved and adaptable than ever.

 

So what exactly is this latest update?

 

Project Serenity: What is Ethereum 2.0?

 

Also called ETH2 or ‘Serenity’, Ethereum 2.0 is the latest implementation of a new technology to the current network. To ensure that every step of this upgrade is tested and effective, it will be initiated in different phases over the next few years. The aim of this blockchain project is to improve the current Ethereum 1.0 network, which is not scalable and efficient enough to handle huge blocks of transactions.

 

The first part of this project is the ‘Phase 0’, which is the layering of the current Ethereum network on a new platform called the ‘Beacon chain’. This program will be connected to Ethereum 1.0 so all the transactions within it will run parallel to the new network.

 

Aside from the Beacon chain, a new way of consensus will also be implemented in Ethereum 2.0. Instead of the ‘proof of work’ mechanism, ETH2 will now use ‘proof of stake’ to approve its transactions.

 

Proof-of-work vs proof-of-stake

 

To get transactions processed, cryptocurrencies rely on two types of consensus mechanisms: proof of work and proof of stake. Since the blockchain doesn’t have third-party intermediaries, these two models validate the exchanges, allowing users to send and receive funds.

 

The proof-of-work protocol (PoW) is popularly known as ‘mining’. Currently, this consensus mechanism is how Bitcoin and Ethereum 1.0 handles transactions within the blockchain. In this process, a form of mathematical equation called ‘cryptography’ is solved in order to  execute a transaction.

 

However, this process takes a lot of mining effort for validators and their computers to untangle this intricate set of codes, which makes it impossible to increase the load of transactions being processed in a short period of time. Not only does this cost time and electricity, but the burden can fall on users who have to pay expensive fees.

 

Additionally, PoW is prone to centralization since only a few organizations can afford to buy ASICs, which are devices that can speed up the process of mining digital assets.

Meanwhile, proof-of-stake (PoS) is currently becoming the latest protocol for cryptocurrencies. The idea behind PoS is for validators to ‘lock-up’ tokens in the blockchain to process transactions.

 

Once a user becomes a validator, they can approve transactions by signing off on them. If the transaction gets through the blockchain, validators can receive incentives that are the same amount as their stake.

 

Ethereum 2.0: The Casper Protocol

 

Along with the Beacon chain, the Casper Protocol is another feature included in phase 0 of the ETH2. As said before, the new upgrade of Ethereum eliminates mining and utilises the proof-of-stake protocol instead for more efficiency. This new consensus has two types: 
Casper the Friendly Finality (FFG) and the Casper the Friendly Ghost: Correct by Construction (CBC).

 

The former will ensure that all the programs within the chain run smoothly without lagging. When new blocks are created through mining, the FFG will be layered on top through the use of smart contracts. On the other hand, the latter will ensure that everything runs parallel within the Beacon chain and is in-sync with the old network until the PoS can stand on its own.

 

The Casper Protocol functions as a PoS mechanism where validators need to ‘stake’ their own ETH coins to become a part of the network. Additionally, their voting power in the chain is determined by the number of stakes they have. To process a transaction, a validator must sign off at least 32 ether coins. This means that if a person staked at least 64 ether, they have more than enough to initiate a transaction.

 

Advantages of staking

 

* It’s environment-friendly

 

Unlike mining, proof-of-stake doesn’t use huge amounts of energy and effort just to execute transactions. This creates a more sustainable process that can benefit the users and the environment. In PoW, miners use a device called ASICs that need to run on large energy consumption to solve the algorithm in the blockchain. Meanwhile, PoS only relies on regular computers to process transactions.

 

* It’s more decentralized compared to PoW

 

When it comes to a ‘decentralized’ consensus mechanism, the PoS creates a more decentralized ecosystem for every validator present in the chain than PoW. This is because it eliminates mining, where ASICs can be used to speed up the process of transactions. The problem in ASICs is that it can potentially create centralized mining in the chain because only a few people can afford to buy this high powered device. People who cannot buy ASICs will be left on the disadvantaged side of the mining pool.

 

* It has a ‘slashing’ feature

 

On top of the rewards concept of the Casper, it also has a ‘slashing’ feature that serves as a form of punishment for validators who misbehave. The gravity of the punishment depends on the situation. Essentially, ‘slashing’ means that a part of the validator’s stake will be removed from the network. This enforces discipline among validators who want to do unscrupulous acts in the chain.

 

* It’s safer than PoW

 

When it comes to safety, the PoS is more secure than the PoW because the validators are selected randomly by an algorithm. This means that coordinated attacks within the chain are impossible because the validators cannot choose to ‘vote’ when it’s not their turn. Additionally, if ever someone tries to breach the chain, they would need to convince the majority of validators within the network. However, with the possibility of 32 ETH getting slashed from their accounts, it’s impossible to initiate an attack in the system.

 

* It’s more scalable

 

The ETH2 features a concept called ‘sharding’ which means that the entire Ethereum network will be split or ‘sharded’ into different sections. These ‘shards’ stand as an individual blockchain linked to the Beacon chain. Within these shards, different transactions are processed, creating a more seamless flow of information and accounts within the network.

 

Disadvantage of Staking

 

* It can also lead to centralization when not checked

 

While it’s impossible to hoard all the transactions in the chain, validators with more stakes can execute rules on the network such as cancelling transactions and creating new guidelines. While this won’t generate any profits, it’s still likely to happen and create disadvantages for users and other stakeholders.

 

PoS vs PoW: Which one is better?

 

There have been a lot of debates about the functionality of both mechanisms over the years. However, the nature of each protocol’s issues come from different perspectives, depending on what aspect of the consensus is being discussed. Both protocols have their own pros and cons. When it comes to the Ethereum update, the world has yet to see what changes the proof-of-stake can implement. At the moment, people in the crypto sphere will have to wait to see if these changes will live up to Ethereum’s promise.

 

Ethereum 2.0 is still on its infant phase, meaning it’s too early to say whether this update is for the better. Only time will tell if the changes applied can deliver the decentralized promise of Vitalik Buterin. In the meantime, it's an indisputable fact that Ethereum is an altcoin that can help revolutionize the finance industry and welcome the age of digital assets in the future.

 

What do you think about the future of ETH?

 

Your comments and thoughts are much appreciated.

 

Thanks,
Karl
Bitcasino.io
 

[TimopheyKa 3900]

I believe that the upcoming update of the ether, which is the second version, can safely declare itself, and I think this will be a great progress, and an indicator that we will soon get a better future, and this is great! Many analysts recommend buying ether and coins that work on it, because we can see a miracle! good luck to all!

[Amiami 1362]

Very good topic, I had doubts about what mining would be from now on, and apparently they opted for a controlled inflation system at the same time that they increase the price of ETH through market incentives and staking...

 

But that may or may not be detrimental to ETH, since on the one hand they control the whales but on the other hand it is the whales who gain more and in turn the weight they can exercise increases ...

[Aledar 48]

That is a great piece of information that you got there, i knew some information from the text, but there was some infromation that was new for me.

[Edwinvicky 819]

Nice information, good to see eth upgraded their network to eth 2.0 in which many people have been waiting for years. For the staking aspect, i heard it requires 100 eth to be able to benefit from the network. The current price of eth to me is not encouraging compare to the previous price during 2017 pump.

 

[Teminali69 1081]

The one big point I got here is that proof of stake sounds more advanced and more useful than proof of work, which takes me back to bitcoin, would we ever see such an update for the bitcoin itself?

[Raqeebzy 6456]

On 12/11/2020 at 1:59 PM, Bitcasino.io said:

What do you think about the future of ETH?

The topic is excellent and so much explanatory. +5 for you @Bitcasino.io. 

ETH looks to maintain its spot as the king of altcoins for years to come with ETH 2.0 release and proof of stake switching. Staking will be the most important part and looking at the amount of staking to become a validator, it will be huge in the next year.

[rekter 8129]

On 12/11/2020 at 2:59 PM, Bitcasino.io said:

 

Ethereum 2.0 is still on its infant phase, meaning it’s too early to say whether this update is for the better.
 

There will probably be some unforseen problems ahead of us with eth 2.0 as it's cutting edge tech, but i would assume that this update is for the better no matter what. This would be an ultimate high stake gamble if it wasn't. And eth 1.0 wasn't going to scale.

Edited December 21, 2020 by rekter

[nykas 2812]

Thank you for your detailed guide about ETH 2.0 It's a really prospective technology and many people have been waiting for the release and hope eth team won't make us upset, because it's one of the most expected projects of the last year 

[yonkii 3205]

What I wonder if the Ethereum staking and the change to Proof of Stake will mean perhaps the end of Proof of Work for upcoming altcoins, and perhaps create terms for projects that are based on this type of mining to change their protocol and switch to Proof of Stake. We have seen 51% attacks in many cryptocurrencies that base the security of their blockchain on miners and hash rate. These coins if they switch to a decentralized staking system perhaps will be more secure. We have to see how Ethereum will manage this first or if others can follow in this development.

[Cleaner 2549]

On 12/12/2020 at 12:01 AM, Irfaniffi said:

ETH are the coins exchange site where we can exchange the coins and we can exchange the coins with the seller and buyer .this is the reliable site and we can trust on this ite.....

eth is not an exchange site.  This is a crypto currency.  Which is called altcoin.  The king of altcoin is eth.  And with these coins you can invest and trade.  You can get this coin on all exchange sites.  This coin has now been upgraded so its many benefits have increased.

[Whited35 15285]

On 12/11/2020 at 6:44 PM, Bitcasino.io said:

What do you think about the future of ETH?

I predict the solid future of Ethereum. Full upgrade process will roughly take around 2 years but have a look at the craze to ETH 2.0 ! There is already more than $1B worth ETHs are locked in the Beacon chain and it is indicating the green signs for it. PoS looking safer and effective as Cardano has already proved it. I am expecting to see successful sharding process from  Ethereum developers 😉 ! 

[ibrahim halil anaç 138]

Thank you for the useful information you wrote about Ethereum. It has become even stronger and more confident with the Ethereum 2.0 technology; Thus, the confidence of Ethereuma people is increasing day by day.

[Abdulrahman3 1252]

I wonder why currencies that are popular with traders offer a second copy ?! For example, we see Ethereum and Ethereum 2, and there are many currencies that do the same thing, and I often see that the second currency is not as widespread as the first, so what is the use of it?

Edited January 20, 2021 by Abdulrahman3

[Wanderdark 2178]

Thank you for creating this informative topic and sharing it with us, my friend. I am so hopeful about the future of the Ethereum, especially after the 2.0 update has been announced. It seems it will take a few years but after that Ethereum will be legendary network. Many claim that it may even become a project to provide "the world computer"

[wisesaba 49]

Etherum seems to maintain it's spot an upgrade... I trust ETH will maintain their spot for long with these their amazing ideas

[Whited35 15285]

On 1/20/2021 at 8:46 PM, Abdulrahman3 said:

I wonder why currencies that are popular with traders offer a second copy ?! For example, we see Ethereum and Ethereum 2, and there are many currencies that do the same thing, and I often see that the second currency is not as widespread as the first, so what is the use of it?

So many reasons are here. If you are concerned regarding the ETH 2.0 upgrade process, you have to keep in mind, increasing DeFi related activities to cause congested Ethereum blockchain network  as well as demerits of PoW consensus algorithm were the key to upgrade existing Ethereum blockchain network to Ethereum 2.0 

[Ukashatu12 20]

I am fed up with information provided above, ethereum2.0 is an improvement to the formal version so that the present version will work efficiently and effectively more than the previous version which I think is a good step in enhancing the capability of the new ethereum.

[Froshk 1828]

Ethereum 2.0 have received massive adoption and thus the upgrade could easily be termed a success, and these can be demonstrated by the massive increase in price of the coin over a short period of time. 

[Whited35 15285]

On 2/10/2021 at 10:18 PM, Devid629 said:

Ethereum 2.0 will be great project and the upcoming new update we will be surprise by the both i mean new and old coin. Hope both coin gain good price. We know daily the price of crypto gain good think so we wait the biggest new project.

Old and new coin on Ethereum, what do you mean ? Your existing ETH from the Ethereum PoW protocol will not be affected even on the PoS protocol-based Ethereum blockchain network. This upgrade is utterly related with the protocol change. Your ETH and other Ethereum based tokens will be functional even on the ETH 2.0 !

On 2/17/2021 at 9:35 PM, mesho said:

Thank you very much for this very important information. I think that we in this world are about to witness a miracle that this exciting coin will do

Can you attempt to be a little bit specific on ETH 2.0 ?