Ethereum 2.0, also known as Serenity, is a long-awaited upgrade to the decentralized network’s protocol aiming to increase scalability, and reduce power consumption of the network
Since its launch in mid-2015, Ethereum has long been one of the most important and prominent platforms. According to the market cap, Ethereum has arguably had a large impact overall thanks to initial coin offerings (ICOs), most of which run on Ether. It has been one of the world’s largest open source projects.
In a similar way, Ethereum has been making constant updates and attempts to improve its underlying ecosystem towards its ultimate goal of becoming a decentralized global computer that could one day replace many of the centralized applications that we use in our everyday life.
One of the most recent changes, the Casper consensus algorithm or Proof-of-Stake, has been the topic of conversation among many Ethereum community members in recent months.
Current Issues Facing Ethereum
The Ethereum network supports dozens of decentralized applications and needs to process a lot of transactions per second. Appending more nodes does not increase the scalability of the network because each one needs to verify each transaction. The increase of use has led transactions‘ time and cost to rise. This makes the Ethereum network slower and inconvenient to use. In a recent speed test, the network only managed 20 transactions per second when last year numbers were between 12 and 45 transactions per second.
Some of the main Ethereum 2.0 solutions
Proof-of-Stake (PoS) solutions:
Ethereum is moving from proof of work to proof of stake. Proof of stake will actually make the consensus mechanism completely virtual. It involves the creation of new blocks and the validation of transactions instead of having an important computing power to gain rewards. Like Beacon and Casper, these solutions change the way Ethereum is mined and how smart contracts are written. Since June 2018, the plan has been to roll out proof of stake on a “beacon chain” to allow easier integration of PoS.
This is a main upgrade that combines many solutions and ideas into one chain that is compatible with the existing Proof-of-Work one. This solution would provide a better environment for smart contracts and DApps. It would theoretically increase the scalability by 1000x.
This is mainly a type of database partitioning into smaller, faster and more manageable chunks called data shards and can be spread across multiple servers. This concept is also applicable to the Ethereum network. As a result, it enhances the scalability, makes transactions effectively fast, and stops any apps from slowing down the entire network.
Phases and launching date
When Ethereum was first launched back in 2015, it was planned to be in four stages: Frontier, Homestead, Metropolis (the current one) and Serenity.Phase 0 – Beacon Chain:
This phase represents the launch of the Beacon Chain that will manage the Casper Proof of Stake protocol for itself and all of the shard chains. Phase 0 will use Casper the Friendly Finality Gadget (FFG) for finality. Finality basically means that once a particular operation has been done, it will forever be there in history and nothing can revert that operation. It will introduce ETH2 which will be a new asset for validators or stakers.
When Phase 0 is complete, there will be two active Ethereum chains (one for 1.0 and the other for 2.0) . Users will be able to migrate their ETH from the Eth 1.0 chain to the Eth 2.0 chain and become validators. BUT, they won‘t be able to migrate it back.
Phase 1 – Shard Chains
Shard chains make scalability and parallelism doable. Phase 1 simply includes construction, validity, and consensus on the data of shard chains.
Phase 2 – State Execution
This is the phase where it all comes together. Shard chains transform from simple data containers to a structured chain state. Each shard manages a virtual machine based on eWASM (Ethereum flavored WebAssembly).
Justin Drake confirms that sharding phases 1 and 2 will come in 2020 and 2021. This is certainly exciting, but a lot of details are still unknown. So, let‘s wait and see!