Ethereum 2.0 – An Upgrade Of The Decade

The cryptocurrency mining company “Hive Blockchain (HIVE)” is said to have passed $1 billion mark on market value. The Vancouver-based company for the past three (03) years has had a stagnant market value below $200 million.

Launch of Ethereum upgrade is most anticipated cryptocurrency news which hasn’t only alleviated Hive but its competitors, RIOT and MARA. The upgrade has allowed both of Ethereum’s rivals to recently cross $1 billion market value in December 2020 and January 2021 respectively.

It can be said that dawn of the year 2021 and the positive launch of Phase 0 (detailed hereunder) for the Ethereum 2.0, has lead Bitcoin in witnessing a positive drive.

So the million dollar question is what exactly is this Ethereum 2.0.

The difference is the shift from the Proof of work (PoW) mechanism to a Proof of Stake (PoS) mechanism. It was reported that it is going to be a system which will be totally new and superior to its earliest form. The upgrade is equipped to curb the supply of Ethereum’s native coin ETH completely. Similarly, ETH had been riding the same bull as that of Bitcoin as it saw huge surge in its value in 2020.

On Sunday, while Bitcoin’s value dipped immensely but Ethereum not only survived but also earned a great deal in value. It also managed to earn an all-time high record for the year 2021 when ETH’s value rose above US$ 1,200. But the story of ETH’s not being affecting by Bitcoin’s dip, lived for very short period of time. In the last hours of Sunday, ETH’s value also dropped and for the time being is hovering over US$ 1,000.

But with the upgrade in place, it is expected that ETH’s value would surge for an unthinkable extent.

In order to understand Ethereum 2.0, one need to understand how normal financial transactions are validated. The financial transaction require validity from either the government, bank or any intermediary authority that guarantees transition of the funds. The blockchain technology if put in modest terms, is a distributed ledger and most blockchain projects use one either of the three algorithms; i.e. Proof of Stake (PoS) or Delegated Proof of Stake (DPoS) or Proof of Work (PoW). These algorithms ensure that the participants dispose of the identical copies of the database files that have been distributed.

It was pointed out that Ethereum Upgrade 2.0 has improved all these three algorithms. For instance,

The Ethereum 2.0 is said to have shard chains, which allows it to conduct 10,000 transactions per second. While in the earlier form of Ethereum Blockchain, only 30 transactions per second were executed. This caters to the delays and overcrowding of the network. In addition, this would allow the system to handle parallel chains of transactions rather then successive transactions.

This upgrade however, will not be an over-night transition and requires great deal of time. It was informed that the Upgrade will be launched in a three-phase role i.e. Phase 0, 1 and 2 respectively.

Despite global pandemic, Phase 0 was launched in December 2020 which is now instigating beacon chain and storing registry of validators. Phase 1 is expected to be sent live in 2021 to assimilate the shard chains. While the exsiting Etherem chain will be part of the shard chains in between phase 1 and phase 2. In Phase 2 shards chains are estimated to be integrated and implemented with the smart contracts and validators. This final phase is scheduled to be launched by the end of 2021 or early 2022.

Last but not the least, Ethereum 2.0 can now increase the efficiency of the usage and increase the overall capacity numerous times.

The three phases when completed without any errors would finally bring an end to the long sovereignty of Bitcoin as the crypto-currency king and attract investors on a larger scale with the security required. However, only time will tell if this upgrade will be the new era for Blockchain adoption.

Post Author: Emma Mia