El Salvador President Nayib Bukele took a victory lap on Monday after the Bank of England’s British pound rapidly depreciated against the dollar. The institution has since resumed quantitative easing. Its action marks a clear pivot that many in the Bitcoin community predicted central banks would be forced into months in advance. Bukele’s Callout Bukele tagged the Bank of England with a triumphant “Told you,” over Twitter, scoring over 14,000 like and 2000 retweets from his followers. His brief comment…
Ethereum was launched on 30th July 2015 to provide a network like bitcoin while focusing on decentralized solutions. It’s currently the second-largest cryptocurrency by market cap and also a highly volatile asset. Recently, Ethereum rose in value to over $4k, although it later dropped by half. Generally, Etherum is one of the most lucrative crypto investment opportunities of our day.
However, after it launched, the Ethereum network began noticing many issues, including slow-speed transactions. So, after several years of inefficiency in service provision, in December 2020, the Ethereum network launched a new version, Ethereum 2.0. it created this new tool to address the problems of the original chain while introducing new features. What are these new features?
Proof of Stake
One of the main developments coming up with the new Ethereum 2.0 feature was the proof of stake. Of course, proof of stake was a necessary feature in the Ethereum network. But why?
Look at the facts, and the POW system had proven inefficient in almost every way. Generally, the costs of mining Ethereum were higher than expected because of leveraging the proof of work. However, Ethereum 2.0 uses proof of stake, which vastly reduces the costs involved in releasing coins.
In Ethereum 2.0, it will replace the miners in the network with transaction validators, who must stake a minimum of 32 ETH. As in popular staking options, the validators’ rewards depend on the value of their stake.
One of the significant reasons Ethereum decided to launch a 2.0 version of its network is the increasing scalability issues that have vastly slowed transactions in the network. However, with the introduction of Ethereum 2.0 comes the solution to the problem, sharding. What is sharding?
Sharding involves breaking down a system or a database into smaller partitions that can easily interact with each other. There are several types of sharding, but the one discussed here is database-level sharding. Once the database is partitioned, each of the small partitions can easily interact with the other.
Ethereum has been working on the concept of sharding the blockchain database for quite some time to provide efficiency. According to multiple sources, the Ethereum chain will have around 64 databases, meaning the network will be 64 times faster than the current state. In addition, the beacon chain will also provide options for cross-shard communications within the network.
The concept of sharding will enable every system to grow to infinite sizes continuously and remain capable of hosting more applications. Furthermore, using sharding, the speed of operation of the network is not sacrificed; instead, the speed and efficiency are maintained at a reasonable level.
Zero-Knowledge proofs were introduced as cryptographic proof that allows users to prove they hold some information without revealing the details. The first class of zero-knowledge proofs was Zk-SNARK (Zero-Knowledge Succinct Non-Interactive Argument of Knowledge). Zk-SNARK is currently used in the Zcash crypto asset to foster the top privacy of the coins.
Ever since the launch of crypto, privacy was one of the utterly sacrificed things to foster decentralization. However, this Zk-SNARKs introduction helped ensure that there will be complete privacy during transactions.
However, there has been a serious issue concerning the complexity of Zk SNARKs and the security therein. Therefore, a new version of Zero-Knowledge proofs, ZK-STARKs, will be created in the Ethereum 2.0 network. ZK-STARKs is considered an absolute improvement of the Zero-Knowledge proofs, which helps foster more efficiency.
Ethereums introductions of the Zero-Knowledge proofs will help in fostering privacy in the transactions. Thus, while it will maintain the transparency of the network, the individual wallet details, including personal information, will remain anonymous. Ethereum could therefore be the first normal cryptocurrency to implant the concept of deep privacy in transactions.
eWASM to Replace EVM
Ethereum 1.0, on launch, introduced a unique concept, EVM, intending to decentralize the financial services in the crypto world. Ethereum Virtual Machines(EVM) is a system capable of allowing people to host smart contracts in the ethereum blockchain.
It is safe to say that Ethereum’s launch aimed to help users create smart contracts that could allow developers to host Decentralized applications like lending, staking, and decentralized games. Generally, by leveraging smart contracts to host such DApps, the developers and crypto investors can enjoy automating their systems while providing services.
The Ethereum Virtual machine has proven to be an essential asset in the Ethereum world. Ethereum, therefore as a network, is not just a blockchain-based financial system; instead, it’s a global computational tool with the best autonomous functions. However, EVM has proven to be a highly complex tool, even for experienced developers.
To introduce a solution, the Ethereum network announced that one of the main features to come after the launch of Etheum 2.0 is a new advanced feature, eWASM. This new tool allows users to leverage different programming languages, including C++, C, and Rust.
Unlike the EVM, which requires deep programming knowledge, the eWASM will be easy to use and develop their DApps. This is probably the feature that the Etherum developers are anxiously ready for since it will utterly ease their developing needs.
The Ethereum chain has been an excellent financial network, but the recent launch of Ethereum 2.0 will improve efficiency in the network. This network includes new features, including POS staking as the primary method of releasing Ethereum coins. Additionally, the network comes with sharding, a system created to help speed up the transactions.
Furthermore, features like ZK STARKs and eWASM were not in the original blockchain and will be excellent improvements from the original network. All these new features are going to provide efficiency and make investments easy.