Résumé
Ethereum 2.0 is a long-awaited upgrade to the Ethereum (ETH) network that promises significant improvements to the functionality and experience of the network as a whole. Some of the most notable upgrades include the move to proof-of-stake (PoS), shard chains, and a new blockchain at the center called the beacon chain. All of these, and more, are expected to be introduced gradually through a carefully planned roadmap.
But that’s just the tip of the iceberg. With Ethereum being one of the most popular cryptocurrencies on the planet, there are some important details about what Ethereum 2.0 actually is and how it will impact all of cryptocurrencies.
Introduction
Since the release of Ethereum, the development of new technologies in the form of decentralized applications (Dapps) and other blockchains has grown significantly. More importantly, many of these technologies have been built on the Ethereum network. Think of some of the biggest innovations in decentralized finance (DeFi); a large portion of them run on Ethereum.
Unfortunately, scalability issues have arisen. As the number of transactions on the Ethereum network increases, so does the cost of executing those transactions (which are paid in gas). If Ethereum is supposed to be the platform that leads the way to the next generation of the Internet, it has to work economically. Otherwise, it becomes unattractive to leave it unused.
This is where Ethereum 2.0 comes in. The proposed ETH 2.0 upgrades to the Ethereum network are meant to address, primarily, the scalability issue. These improvements will create a contrast with the current version of Ethereum, and will all be rolled out according to a carefully planned roadmap.
What is Ethereum 2.0?
Ethereum 2.0 (also known as Eth2 or "Serenity") is the long-planned upgrade to the Ethereum network that promises, among other things, to improve the scalability of the network. Through the implementation of several improvements, speed, efficiency, and scalability are to be improved without sacrificing security and decentralization.
This version of Ethereum has always been on the horizon, but it took a few years to roll out. The main reason is that scaling a blockchain in a secure and decentralized way is a difficult task.
Fortunately, Ethereum 2.0 aims to solve this problem by implementing some very important features. These new features create several key differences between the Ethereum we know and the Ethereum we should expect.
Differences between Ethereum and Ethereum 2.0
The main differences between Ethereum and Ethereum 2.0 involve the use of the Proof-of-Stake (PoS) consensus mechanism, shard chains, and the beacon chain. Let’s take a closer look at these differences.
Proof of Stake
Proof of Work (PoW) is how Ethereum (and many other blockchains) keeps the network secure and up to date by rewarding miners for creating and validating blocks on the blockchain. Unfortunately, PoW is not scalable, as it requires increasing computing power as the blockchain grows.
Proof of Stake (PoS) solves this problem by replacing computing power with “stake.” In other words, as long as you have a minimum of 32 ETH, you can stake it, become a validator, and get paid to confirm transactions. If you want to learn more about how PoS and staking work, check out Proof of Stake Explained.
Sharding
Anyone who wants to access the Ethereum network must do so through a node. A node stores a copy of the entire network, which means that the node must download, compute, store, and process every transaction since Ethereum began. While you, as a user, don’t necessarily need to run a node to make a transaction, it slows everything down.
Shard chains are like any other blockchain, except they only contain specific subsets of an entire blockchain. This allows nodes to manage only a portion (or shard) of the Ethereum network. This should increase transaction throughput and Ethereum's overall capacity.
The Beacon Chain
Since shard chains run in parallel, it is necessary to ensure that they all stay in sync with each other. The beacon chain takes care of this by providing consensus to all shard chains running in parallel.
The Beacon Chain is a brand new blockchain that plays a central role in Ethereum 2.0. Without it, information sharing between shards would not be possible and scalability would be non-existent. For this reason, it has been stated that it will be the first entity launched by the time Ethereum 2.0 arrives.
The Path to Ethereum 2.0
The Ethereum 2.0 rollout will not happen all at once. Instead, it will be rolled out in three phases, each bringing distinct features to ensure the success of the new Ethereum.
Phase 0
The first phase, or Phase 0, will be dedicated to the release of the Beacon Chain, as it is at the core of the Shard Chains functionality. There will be no shard chains yet, but the Beacon Chain will begin accepting validators (i.e. stakers) through a one-way deposit contract.
It is important to note that all registered validators who stake their ETH will not be able to “withdraw” their funds until the shard chains are fully deployed. This means that validators’ ETH will be locked until the next phase.
The Beacon Chain was launched on December 1, 2020, and runs parallel to the mainnet. The Beacon Chain does not process mainnet transactions. Instead, it runs in parallel, reaching consensus by accepting active validators and their account balances.
Phase 1/1.5
The next phase is actually a mix of two phases: Phase 1 and Phase 1.5. Phase 1 will introduce shard chains, which will allow validators to create blocks on the blockchain via PoS. Phase 1.5 is when the Ethereum mainnet will officially introduce shard chains and begin transitioning from PoW to PoS.
Phase 1/1.5 began rolling out in 2021.
The merge
The merge is an important milestone for Ethereum 2.0, and it is also the conclusion of the transition to PoS. The merge will move the Ethereum blockchain from a PoW consensus mechanism to a PoS mechanism.
The “merge” involves the transition of the current Ethereum mainnet protocol to the Beacon Chain. This is a major change, as Ethereum transactions will now be performed on the new PoS network. The new ETH tokens will be issued by nodes on the network, staking a quantity of Ethereum tokens in a pool to secure the network and validate transactions.
The “merge” is not a hard fork that would result in two different versions of the blockchain. Ethereum will continue as a single blockchain, and all user transaction history will be merged. The history of all transactions currently stored on the mainnet will not be lost; therefore, users do not need to take steps to protect their assets.
Phase 2
The final phase will be Phase 2, which is when Ethereum 2.0 will support fully formed shards and become the official Ethereum network. Shard chains will also be able to run on smart contracts, allowing developers of Dapps and other technologies to seamlessly integrate with Ethereum 2.0.
Phase 2 is expected to be launched following the merge or later.
To conclude
Ethereum 2.0 is a significant upgrade to the Ethereum network for a number of reasons, including scalability. Without new features including PoS, shard chains, and the beacon chain, Ethereum could eventually become too congested and no longer be the premier smart contract platform in the cryptocurrency ecosystem.
The Eth2 rollout will take some time, and it may even take longer than expected. The good news is that it is already underway and Ethereum developers are working hard to get it done.
