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The Ethereum 2.0 update continues to be one of the most anticipated crypto events of the year. Ethereum 2.0 is a multi-lab initiative that seeks to take the world’s second most popular cryptocurrency to new heights. The upgrade will introduce a host of new features and functionalities to the network.
Specifically, the new protocol improves the speed, efficiency, and scalability of the entire network. Developers believe the integration will alleviate congestion and lower gas costs for smart contract developers. Importantly, gas is the currency in which smart contract developers pay to execute their protocols. The higher the gas prices, the higher it costs to run a smart contract.
To accomplish this task, developers introduced a new form of sharding to the network. Sharding is the dismantling of a database into multiple smaller units. Developers prefer sharding because the groups can handle requests individually. This strategy makes it cheaper to accomplish the core tasks of the Ethereum network – sending Ethereum and utilizing smart contracts. Consequently, token development and Dapp development are more cost-efficient using this technique as well.
Ethereum 2.0 Features
The Ethereum 2.0 update will also increase network bandwidth. This increase will allow for more scalability as the network’s ecosystem grows. Additionally, ETH holders will now gain the ability to stake their tokens. Staking is another way in which blockchains can secure their network. The Proof-of-Stake algorithm allows users to earn Ethereum as passive income by holding their tokens in a network wallet.
According to company documentation, the Ethereum 2.0 update will occur in three phases. The first phase has begun. This phase, known as Phase 0, includes the launch of the Medalla Testnet. This integration stage will provide valuable feedback on the upgrade as over 20,000+ validators signed on to test the multi-client protocol. Notably, developers stated that they intend to have a public test before Ethereum 2.0 Phase 0 is official.
Phase 0 – Beacon Chain
The official launch of Phase 0 brings with it the introduction of a new token labeled ETH2. Anyone holding ETH can trade directly for ETH2 on a 1:1 basis. The trade occurs utilizing a registration contract. Upon the completion of your trade, the original ETH gets burned. Notably, Phase 0 allows the community to stake 32 ETH2 on validator nodes.
Phase 1 – Shared Chain
The next step of the strategy is Phase 1. In this stage, developers will provide randomness for a shard block. The block will split into 64 shards. These shards will have the capability to function on their own. They can also communicate with each other utilizing a new cross-linking protocol.
Phase 2 – Execution Engine
The Ethereum 2.0 upgrade’s final stage will bring together the new PoS network with the existing proof-of-work (PoW) blockchain. From this point, ETH2 will be the token supported by developers. However, there will still be some who decide to keep ETH, just like there are those that still hold ETH classic to this day.
The Current State of ETH 2.0
This month saw some significant progress in the Ethereum 2.0 roadmap. The final testnet Medalla launched earlier in the month. The response so far has been great. Over 30,000 validators have joined the network. Also, over 946,000 ETH is now in staked wallets since the program started.
The testing period is open to the public. This strategy keeps the platform in line with the democratic values of the blockchain sector. According to recent information, the developers hope to run the test until the end of the year. At that point, they intend to ensure that all of the five clients working on the project can communicate. These clients include Prysmatic Labs’ Prysm, ChainSafe’s Lodestar, PegaSys’ Teku, Status’ Nimbus, and Sigma Prime’s Lighthouse.
Ethereum Shifts for the Future
Ethereum’s decision to change consensus mechanisms from a PoW over to a PoS was a risky maneuver to take. However, this development team has the skills, experience, and gull to upgrade everything they promised and more. You can expect to see Ethereum continue to dominate the sector for years following this epic hard fork.