Ethereum 2.0 - Explained

Ethereum, the second largest cryptocurrency and a decentralized open source blockchain network that possess smart contract functionalities was initially released in 2015. After the continuous process, the Ethereum community has come up with the new idea called Ethereum 2.0, which is a complete shift of the whole ethereum mainnet into a new blockchain network with different phases.

Ethereum 2.0 - The Years-Long Upgrade of ETH

Ethereum 2.0 or ETH2 or Serenity is the evolution of Ethereum network into the next phase for the performance improvement of Ethereum. The main aspect in this upgrade is the shift of Ethereum’s consensus algorithm from Proof of Work (PoW) to Proof of Stake ( PoS).

This Ethereum 2.0 will result in the improvement of security, usability and scalability of the ethereum network as a whole. The upgrade will be live in multiple phases, starting with Phase 0 in this year of 2020.

This launch of ETH 2 is the most significant upgrade compared to the past upgrades as this Ethereum 2.0 implements Proof of stake mechanism, which moves the network from its old or existing Proof of Work consensus algorithm.

Ethereum 2.0 Phases

Phase 0

Phase 0 is the beginning phase of ETH 2, which will launch only the Beacon chain of the Ethereum 2.0 network, that implements the Proof of Stake by managing the registry list of validators. This phase doesnot offer for the shared chains or execution, ie., the participants are not allowed to make transactions or call smart contracts on Ethereum 2.0.

Phase 1.0

Still there is no clear announcement for the launch of Phase 1, but it is expected in the year following the launch of Phase 0. The launch of Phase 1 has the implementation of shared chains, which is for the elimination of scalability issue of Ethereum 1.0.

Phase 1.5

One of the important parts within phase 1 is the merge of PoW ETH chain with the new PoW chain. This is referred to as Phase 1.5 by the Ethereum Community, in which the PoW chain will be brought to the ETH 2.0 as one of the 64 shared chains in the beacon chain.

Phase 2

Still, there is no clear definition for Phase 2. However, we know that Proof of Stake and Sharding has been implemented in Phase 0 and Phase 1, Phase 2 will be the enabling thing like Ether accounts, transaction and smart contract executions, etc.,.

Ethereum 2.0 Staking

The upgrade of ethereum replaces Proof of Work with Proof of Stake consensus mechanism.

One should hold a certain amount of Ether ( ETH ) to participate and make reward in the blockchain network.

Ethereum 2.0 staking is the process of locking up some amount of ETH( 32 ETH ) in the wallet to make participation in blockchain mining and get rewarded in return. PoS has several variations in it, which allows people to be involved in staking.

This Ethereum 2.0 upgrade notably increase the decentralized space in the crypto market. This ETH 2.0 update not only increases the performance, scalability and security of Ethereum network, but also its position and potential in the cryptocurrency market.