The Long-Awaited Ethereum Network Update Is Set To Solve The Scalability And Security Problems Of This Network. In The First Phase Of Ethereum 2.0, Ethereum’s “Global Computer” Will Be Transformed Into A Stock Proof Mechanism.

Ethereum 2, Ethereum Multi-Phase Update will address network security and traffic issues through several new infrastructures, including the use of stock proofs and sharing.

In this article, we will thoroughly review the upcoming Ethereum China blockchain update called Ethereum 2. Stay tuned.

The titles you will read in this article:

• • What is Ethereum 2?

  • Ethereum problems 1

  • The difference between Ethereum 2 and Ethereum 1

  • Ethereum scalability 2

  • Ethereum Security 2

  • The effect of Ethereum 2 on Diffay users

  • How to invest and stick in Ethereum 2

  • How does the transfer to Ethereum 2 take place?

  • The effect of Ethereum 2 on the price of ether

  • What will the future of Ethereum 2 look like future?

What is Ethereum 2.0?

Ethereum 2, also known as Serenity, is a software and infrastructure upgrade for the Ethereum blockchain. This upgrade aims to increase the speed, productivity, and scalability of the Ethereum network so that more transactions can process and traffic can reduce.

According to Ethereum co-founder Vitalik Butrin, after using Ethereum 2, the network speed will increase from the current 15 transactions per second to a potential 100,000 transactions per second. This update will also increase the security of Ethereum’s network and drastically reduce its carbon emissions.

In the following, we will examine the ways offered by Ethereum 2 to improve the current China block; But the question is, what problems caused Ethereum 2 to emerge?

What are the problems with Ethereum 1?

The Ethereum version introduced in 2015 was quite groundbreaking, But the unprecedented demand for the platform provided some problems. These problems can be divided into three main categories:

• High-traffic network: Ethereum blockchain is so congested that it is not ideal for global use. For maintaining security, all network nodes must authenticate transactions on the blockchain, which reduces transaction time.
• Low Disk Space: As the popularity of the Ethereum network increases, it becomes more difficult to run software called nodes; Because the volume of the general ledger, which contains the history of all transactions, increases dramatically. The difficulty is finding a way to increase the size of Ethereum without compromising its decentralisation.
• High energy consumption: Ethereum uses a consensus-based consensus to maintain its security, which is not cost-effective in the long run due to increased energy consumption.

The Ethereum team, in addition the maintaining critical existing structures, including decentralisation, is trying to solve these problems. Ethereum 2 is the solution to achieving greater scalability and security without becoming a centralised network.

What is the main difference between Ethereum 2 and Ethereum 1?

The main difference between the two versions is that Ethereum 1 uses the Work-Witness Consensus (PoW) mechanism; Ethereum 2, on the other hand, relies on stock evidence (PoS). In the following, we will further examine this fundamental difference and other innovations of Ethereum 2:

Replacing stock witnesses instead of labour witnesses

In the Ethereum blockchain, transactions must authenticate in a decentralised manner. Ethereum, like other cryptocurrencies, including Bitcoin, currently uses a work-based consensus mechanism.

In this system, miners use their processing power to solve complex mathematical problems and approve transactions. The first miner solves the problem, adding the new transaction to the archive of all completed transactions called the ledger (ledger). Miners are rewarded with native network cyphers, But going through this process is very energy efficient.

Evidence of stocks is different in that users lock their investments in the network; This is called steaming. Sticky cryptocurrencies are the native cryptocurrencies of the Chinese blockchain, and users who try to stick are called validators. Authenticators are similar to miners who verify network transactions to ensure that the network is not processing fraudulent transactions.

The selection of these verifiers is based on the amount of digital currency tagged and how long they continue to stick.

Verifiers can verify when they see a block. That block can be added to the China block when there is enough confirmation. The verifiers are rewarded if the block is successfully added; this process is called forging or minting (meaning forging).

The main advantage of stock-proof is that this mechanism is much more cost-effective than labour-proof; Because this method no longer uses high-end computers to perform consensus in the Chinese block.

Sharding

Another step to improve the reduction of traffic and increase the number of transactions is the introduction of a process called sharing. In the current blockchain version, all data added to the chain must be approved by all nodes. It means that the speed of the whole system is limited to the slowest participant. It creates a bottleneck that increases transaction costs and reduces throughput.

By adding networking, Ethereum 2 can significantly increase its resource efficiency. In the new system, data verification tasks are divided between sets of nodes, and each of these nodes is only responsible for verifying the transactions assigned to it. It allows parallel processing of the Ethereum global computer, which multiplies the system’s processing power.

Ethereum Blockchain will be much faster and more efficient than its predecessor with its stock-sharing capability.

eWASM will replace EVM

One of the key features that makes Ethereum so reliable and a competitor to Bitcoin dominance is the “Ethereum Virtual Machine or EVM”. EVM is an executable environment that runs on all nodes that facilitate intelligent contracts. Instead of a purely financial system, these smart contracts turn the Ethereum China blockchain into a global computing machine. Smart contracts on EVM can execute games, complex financial transactions or even social networks.

EVM is widely used; But understanding it is a complex puzzle, even for those with high programming skills. To solve this problem, Ethereum 2 has introduced “Web Assembly Language or eWASM”. ASM enables Ethereum apps to run in today’s web browsers, a significant improvement over EVM.

Developers can also select multiple languages, including Rust, C, and C ++, to execute code on the blockchain. eWASM, in a sudden leap, draws a large number of programmers into the Ethereum ecosystem; Because many doors will be opened to users, and they no longer need to learn Ethereum-specific language.

How can Ethereum 2 be better scalable than Ethereum 1? 

One of the main goals of Ethereum Upgrades is to increase scalability, which means improved traffic and the number of transactions processed.

Ethereum 1 can only support 30 transactions per second, which causes delays and congestion. Ethereum 2 promises 100,000 transactions per second. This progress is achieved through the use of the Shard Chain.

The current Ethereum chain has only one chain consisting of consecutive blocks; This system is safe but very slow and inefficient. As mentioned earlier, the blockchain will be divided into several sections with the introduction of shard chains. Transactions will be processed in parallel, thus speeding up the network and increasing its scalability.

How can Ethereum 2 be better secured? 

Ethereum 2 is built with security in mind. Most stock-proof networks have a small set of verifiers, which makes them more focused and less secure. Ethereum 2 requires at least 16,384 certifiers; This makes the network more decentralised and secure.

Least Authority and Quantstamp carry out Ethereum 2 security surveillance. The Ethereum Foundation has also set up a dedicated security team to investigate Ethereum 2 cyber security issues.

One of the tests that this team will do on the new version is the fuzzing test; by giving non-standard inputs to the software, they will examine the answers. Other activities of this group include cryptographic economic modelling, applied cryptographic analysis, and formal competency review.

 What effect will Ethereum 2 have on Difai users?

Ethereum has a robust decentralised financial ecosystem; But for the most part, it is virtually useless due to congestion and very low speeds. This congestion can cause the user to incur more transaction costs than the transfer amount.

In the current situation of Ethereum, only those who have a lot of capital can use its financial ecosystem. The cost of exchanging cryptocurrencies on Uniswap, a decentralised exchange that provides liquidity on the Ethereum network, is less than $ 150. It makes it impossible to transfer money or trade small amounts.

Due to miner control, transaction fees are high, but this problem will no longer exist despite the stock evidence.

As mentioned, Ethereum currently processes 30 transactions per second; But Ethereum 2 can process up to 100,000 transactions using sharding and other techniques. Vitalik Butrin tweeted:

Data scalability in Ethereum 2 will be available for general calculations before scalability. This pattern will be the primary approach for at least the first few years: first, approximately 2,000 to 3,000 transactions per second will be processed using Ethereum as Layer 1, then in Phase One Ethereum 2, we will have about 100,000 TPS.

Ethereum Investment and Stick 2

Ethereum 2 blockchain uses share proofing, allowing Ether 2 holders to authenticate blocks on the network by investing their so-called cryptocurrencies in the verifier node. The network rewards the owners for this.

Sticking in Ethereum 2 starts with phase zero of this update. The first step for steak in Ethereum 2 is to send some Ramzarz ether in the Ethereum 2 smart contract. It is a one-way process, and you can no longer recover your passwords until phase 1.5 of the update is finalised. From this link, you can access the mentioned smart contract on the official Ethereum website.

Those who want to be selected as confirmers in the new network must lock 32 ethers in the contract; Of course, it is also possible to lock in smaller amounts in the hope of making a profit. In the list mentioned in the link, you can lend your ether to one of the said items.

As mentioned in the previous sections, you will be rewarded for this, and your representative will have a better chance of being approved.

The profit earned from the steak in Ethereum 2 is listed in the same link as APY.

This annual interest rate was initially 20% or more and gradually declined after reaching its financial target and minimum locked-in capital.

You should note that some exchanges, such as Binance, also allow you to stick in Ethereum 2. In this way, you trust the money changer as your representative and receive a profit for the amount stuck.

The question that arises here is whether exceptional work is needed to convert ether 1 to ether 2? The answer should be no; Your ethers will be automatically converted after the update and used in the new network.

How will the transfer to Ethereum 2 take place? 

Ethereum 2 is released in several phases. Phase Zero was called Beacon Chain and was released on December 1, 2020. Bacon China Introduces Possibility of Steak on Ethereum China Block; A pivotal change to the PoS.

The Ethereum-based PoW-based core network operates alongside a separate Chinese block of bacon; This new blockchain does not interfere with the original Ethereum blockchain and runs separately.

Phase 1, which is scheduled to run in the first and second half of 2022 (December 1400 to July 1401), will merge Ethereum’s core network with China Bacon, and the PoW will be officially completed.

At this stage, those who ether stuck on Chinese bacon will be selected as the confirmer. This phase will take place after EIP-1559, known as the London Hard Fork.

 No significant changes will make to the Ethereum Virtual Machine (EVM) in this phase, and no withdrawal will be possible.

The final phase is the Shard Chain and will play a vital role in the scalability of the Ethereum network. Instead of processing all transactions on a blockchain, 64 new chains, called shard chains, will perform the processing; This means that the throughput of Ethereum 1 is 64 times. But at the time of Shard China, smart accounts and contracts will not support.

Also, from a hardware point of view, nodes can run the Ethereum more easily; Because less data is stored on the machine. Shard China will not be implemented until 2022, and its release date is unknown.

The effect of Ethereum 2 on the price of ether 

For many people, the release of Ethereum 2 is really what digital currencies need. Jamie Anson, founder and organiser Nifty Orchard Hardfvrk London, in an interview to decrypt”The bullet will shoot!”

In other words, more scalability means more use, and this, in turn, leads to more demand. It will increase the price of ether to new heights.

“People,” says Enson.

With the release of Ethereum 2, more than 100,000 transactions per second will process; This means a whole new experience for millions of people.

Blocknative CEO Matt Cutler is optimistic about Ethereum 2; Because it expects its release to reduce network costs and lower fees. ” Our customers see the reduction in fees and the increase in network capacity as an opportunity forward,” he said.

The achievement of the ecosystem will also significantly strengthen the Ethereum developer community. “Cutler goes on to say:

It will have a long-term effect on the price of ether, regardless of the cross-sectional fluctuations that are an integral part of the cryptocurrencies.

The future of Ethereum 2 

Ethereum co-founder Vitalik Butrin has published a five- to the 10-year roadmap for Ethereum 2. He tweeted:

It is my approximate view of Ethereum 2 for the next 5 to 10 years.

@VitalikButerin

pic.twitter.com/wynMVC04Ag

In June 2020, Butrin announced that Ethereum 2 would rely on current scalability methods, including ZK-rollups, for at least two more years before using shard chains.

August 2021 saw the use of the London Hardfork and EIP-1559, which changed Ethereum network fees. EIP-1559, or the Ethereum Improvement Plan, burns part of the fee paid by users instead of giving it to miners, reducing ether inventory and putting anti-inflationary pressure on the Ethereum network.

London Hardfork was like a test for the next phase of Ethereum 2, and Vitalik Butrin expressed his confidence in Ethereum’s next step. In an interview with Bloomberg, Butrin spoke of London’s successful implementation of Hardfork, saying it proves that the Ethereum ecosystem is “capable of fundamental change” and “makes me more confident about [the next step] integration.”

But it will not be easy for Ethereum. Ethereum is in the process of moving to its next version. Still, other competitors are known as “Ethereum killers”, such as Cardano, Solana, etc., if completed and provide similar services, may permanently take down the Ethereum network and replace it.

What do users think about the future of Ethereum 2? Will Ethereum 2 solve the problems or make it more centralised?