Well, the waiting seems to be finally over! On October 4th, the ETH 2.0 deposit contract was finally released, which contains all the details of the contract. However, this version will only activate the agreement when there are at least 16,384 validators and 524,288 ETH deposited in it at 12 o’clock UTC on December 1st. Obviously, this does not mean that the final version of Ethereum 2.0 will be launched on this day, but that the smart contract required for the launch will take effect. But how exactly does Ethereum 2.0 work? What news will it bring? And what are the basic stages of the long-awaited “press conference” for the mainnet?
Introduction to Eth2
Ethereum 2.0, or Eth2, is a long-planned Ethereum network update. If all promises are kept, capacity and security will be improved, which will attract more support. The idea behind this update is to significantly reduce energy consumption by converting the PoW (Proof of Work) algorithm to the PoS (Proof of Stake) algorithm, and the network is larger than the current number of transactions. In addition to the epoch-making change from PoW to PoS, sharding chains will also be introduced. This concept has existed in the blockchain world for some time and will be tested on the new version of the protocol. Finally, as previously expected, the actual deployment of Ethereum 2.0 will be divided into three different stages, which will be analyzed later. are you ready?
Why choose Ethereum 2.0?
Since its launch in 2015, Ethereum has become the largest programmable blockchain in terms of the number of DApps (decentralized applications) and the number of smart contracts developed. Compared with Bitcoin, Bitcoin’s scripting language is relatively rigid, and Ethereum, through Turing’s complete programming language Solidity, allows you to create more free contracts. However, everything has two sides. Any form of smart contract can be created with bugs and errors, which can cost users millions of dollars. However, now, the fundamental problem of Ethereum is that there is a strong need for expansion to realize its true potential, because only 15 tps (transactions per second) creates an insurmountable bottleneck. As a comparison with known systems, Visa’s processing capacity is around 1500tps, which makes it possible to expand globally as a payment service. The current consensus algorithm PoW requires high energy costs in the mining process for security reasons, but it cannot be expanded as needed. The standard for achieving “scalability, security, and decentralization” is by no means
Little thing, this is why Ethereum 2.0 has to wait so long.
How to choose PoW and PoS and why?
Proof-of-Work consensus algorithm is based on the concept of miners to ensure network security and synchronization. By investing a lot of computing power, a block is created and unconfirmed transactions are included in the block. Although in theory, this is the safest method of cryptocurrency, for an application that wants to expand globally, the energy consumption is very large, and the speed of verifying transactions is also very low. Proof-of-of-Stake replaces energy consumption: there are no miners, but only verifiers. They can stake their ETH to verify and create new blocks to earn new Ethereum . Then, the validator runs the software, confirms the transaction and creates a new block on the chain. The capital investment required to become a single validator is 32 ETH, but in the future, there is likely to be a chance to participate in a smaller amount by joining the staking pool. In order to start the various stages of Eth2, in the 7 days before December 1, 2020, there must be at least 16,384 validators and 524,288 ETH deposited in it.
What is a shard chain?
Another important update regarding version 2 of the protocol is the shard chain. These “chains” can be regarded as blockchains parallel to the main chain, and they are always responsible for a considerable part of the data processing work in the Ethereum ecosystem. At present, if a node in the network processes a transaction, it must download, calculate, archive, and read every transaction in the history of Ethereum. This is also one of the reasons why Ethereum can only execute 15tps at this stage. With sharding, nodes will be dispersed into sharded subsets, and only need to download, calculate and archive each transaction in the subset, not the entire network. Then, the task of the “beacon chain” will be to ensure that all nodes are synchronized. This “chain” will be the central blockchain in Ethereum, and it will provide consensus for all shard chains. On each shard chain, the validator will create a transaction block and report it to the beacon chain, which will then provide this information to everyone.
Ethereum 2.0 roadmap
As mentioned earlier, an update of this scale requires development, and it is not a trivial matter in terms of coordination and security. To this end, the update from 1.0 to 2.0 will be mainly divided into three stages.
Phase 0: Beacon chain.
The first thing to be completed will be the establishment of the beacon chain. Since the shard chain is not currently supported, there will be no real synchronization. In the beginning, the chain only needs to register validators and coordinate the ETH that everyone bet. We are at this stage now, and the deposit contract was released yesterday.
Stage 1.5: The main network becomes a shard.
At this stage, now Ethereum will become a shard and will officially be converted to Proof-of-Stake.
Phase 2: Complete sharding
In the second and final stage, these shards will fully function, be compatible with smart contracts, and be able to “freely communicate”. This stage should complete the transition, and finally make Ethereum a large-capacity project that can bear a large number of users.
Consensys.net
to sum up
What we are about to see in the Ethereum network is an epoch-making change from many perspectives: first, because PoS will eventually be tested in a huge project, first for the community behind it, and second, to see the sharding Will the parallel operation of the chain and the beacon chain have a good result? We are just the first step of the change: the conditions seem to be favorable, we just have to wait to see if the agreement can fulfill its promise in a relatively short period of time.
