Is The Release of Ethereum 2.0 Exactly What 2021 Needs?
What will Ethereum be worth in 2030?
Hello Crypto lovers, traders, and enthusiast!
Crypto Capital Network is back and here to introduce to you the launch and release of Ethereum 2.0. The entire crypto community has been eagerly awaiting its launch for years and are thrilled to hear that its implementation will begin in the coming months of 2021.
For those of you that are new to the space, I will try to explain first what Ethereum is and how Ethereum 2.0's sharding mechanism has helped to improve the throughput of the blockchain and in turn has massively benefited the entire crypto community.
What is Ethereum?
By definition Ethereum is a global open source platform for decentralized applications. Let’s break that down a bit, shall we?
Ethereum being global means that their are nodes around the world helping to secure the blockchain allowing for decentralization and equality.
Ethereum being open source means that any Joe Shmoo can see and edit the code of the blockchain. To ensure all changes to the blockchain are good and indeed what the community wants there is a vote that takes place before any of the changes are made.
Ethereum being decentralized means that in order for a block to be added to the chain it must first be won or selected from a random subset of nodes throughout the global network. The randomness of the nodes and their locations help to secure the blockchain from all sorts of attacks including the most infamous 51% attacks.
Ethereum being used to make applications means that developers are able to use the open source Ethereum blockchain code to build their own use cases of the technology. Today, nearly half of the top 100 coins are built off the Ethereum blockchain and in the future there will be many more applications built upon the network.
So now that there is a solid of understanding of what the Ethereum is. What's this Ethereum 2.0 talk?
Before we dive straight into how Ethereum 2.0 will help to improve the existing blockchain, we need to first talk about how a consensus mechanism helps choose what block will be added next to the blockchain.
What is a Consensus Mechanism?
There are many ways or what are called consensus mechanisms for allowing new blocks to be added to the chain, but among the most popular are Proof of Work (POW) and Proof of Stake (POS)
Bitcoin and the original Ethereum use the POW consensus mechanism and requires massive amounts of computing power to be able to compete to solve an equation and win the right to add that block to the chain, or perhaps more importantly to win the reward for adding that block to the chain. This method is not sustainable and certainly not carbon neutral. The more computers that are trying to solve this equation the more likely they will be in adding the block and collecting the reward. With much of the computing power controlled by the Chinese it is not quite decentralized.
Ethereum 2.0 is uses a POS consensus mechanism to validate transactions on the network and add them to the blockchain. They do this by allowing users to currently lock up 32 Ethereum tokens in a separate wallet to be “staked” to validate transactions on the network. All of the proof of stake coins have their different rules for rewarding their users for staking their coins and our readers are encouraged to check out stakingrewards.com to see the latest and up to date staking rewards for Ethereum 2.0 and all other POS coins. The end result is a decentralized protocol for adding new blocks to the chain in a way that does not contribute to global warming or climate change.
What is Sharding?
Sharding is a new Ethereum 2.0 protocol that aims to fix the scalability issue of the Ethereum blockchain. In the past the network has been limited to around 15 transactions a second making it a relatively slow blockchain with high transaction costs. Sharding is a process in which the main blockchain (beacon chain) breaks off into smaller chains (shards) that run parallel to the beacon chain. This allows nodes to only render the data within the shard as the main chain makes sure all the shards stay up to date with the most recent data.
Sharding increases the speed and throughput of the Ethereum blockchain allowing users to send Eth or ERC-20 tokens with greater ease and with smaller gas fees. With the increased scalability Ethereum should be able to handle more applications and transactions on the network without issues like the 2017 crypto kitty complication that almost crashed the network.
When is Ethereum 2.0 Coming to the Public?
Ethereum 2.0 is set to be launched in Phases. Ill outline each below.
Phase 0: Proof of Stake Beacon Chain Without Shards
Phase 1: Sharding
Phase 1.5: Ethereum Mainnet will Become a Shard
Phase 2: Final Phase Where Developers can Create Shards and Smart contacts.
Phase 1.5 should be complete in the summer of 2021 with the full transition to Ethereum 2.0 sometime in 2022.
How Much Will it be Worth?
To guess what Ethereum could be worth in the future would be futile because it is too early to tell. What we can say is that it is rivaled in market cap only by Bitcoin and with its increased capabilities and use cases we see this coin easily becoming a $10,000 coin within the next couple of years.
We are excited about the future of this space and its ability to change the world. Who else is excited about Ethereum 2.0? I for one can’t wait to start Staking!
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Thanks again for reading!
Crypto Capital Network
Josef S Loffler
