Ethereum is the second most popular cryptocurrency, and it runs on a decentralized software framework that makes it simple to create smart contracts and decentralized apps. The core protocol has gone through continuous upgrades throughout Ethereum’s history.
The Ethereum Network has been upgraded to version 2.0, Serenity, which improves the network’s speed, reliability, and scalability. That means it can process more transactions while reducing network congestion and transaction costs. It aims to make the system more transparent and open up the network for decentralized finance (DeFi) and applications.
The Phases of Serenity
Due to the systemic complexity of Ethereum 2.0, it has been split into several phases. It reduces the possibility of technical problems that could occur from introducing so many changes at once. Read more to know about the known phases:
Phase 0, the initial phase, began in December 2020 and laid the foundation for the Beacon Chain. Ethereum’sPoS consensus system, validator nodes, and upcoming shard chains will all be controlled by this new blockchain.
The next step on the roadmap is Phase 1, which will provide more resources aimed at easing the strain on the Ethereum ecosystem. The main Phase 1 innovations are shard chains and roll-ups, which are a more recent creation.
The functionality of Ethereum 2.0 comes together in Phase 2. The Ethereum-flavored Web Assembly Virtual Machine will be introduced by ETH (eWASM). Shard chains progress from simple data markers to fully functional transactional chains that can scale the Ethereum network.
After Phase 2, the roadmap for Ethereum becomes less precise. Developers will keep working on pressing issues and developing the protocol to keep up with the rising demands of blockchain technology.
What is Proof of Stake?
Validators take the place of miners in a proof-of-stake consensus mechanism. Their primary function is to propose new blocks and provide computing capacity, storage, and bandwidth for transaction validation.
Validators are paid in ETH regularly. These validators are supposed to lock in a deposit contract worth 32 ETH. It’s a form of security deposit that can be completely or partially forfeited in the event of fraud. This technique is very successful in preventing fraud.
What is Sharding?
Sharding is a form of data partitioning that divides a massive database into smaller, more manageable chunks to improve overall performance. Shard chains are formed by sharding or partitioning the blockchain’s data processing obligations into smaller bits. This reduces the network validator burden by forcing each validator to store and handle only one shard of the network rather than the entire blockchain.
Investing in Ethereum
Remember that as ETH 2.0 launches, the blockchain technology that underpins it will alter, not the cryptocurrency itself. You won’t have to buy any new tokens, and you won’t have to do any laborious transfers from one digital asset to another. Before you make decisions to invest in Ethereum, it’s best to read more and do your homework.
Ethereum 2.0’s scalability and enhancements would allow for significantly faster transactions and Dapps. Fees can be reduced, allowing for more creativity at a lower cost to both consumers and developers. Traditional centralized financial systems’ speeds would be met and exceeded by DeFi software.
Sudarsan Chakraborty is a professional Blogger and blog writer. He lives and breathes in the blogging industry. He regularly writes on Widetopics to keep all the readers updated with the latest facts on wide range of topics.