Have you heard about the new Ethereum Network?
What do you know about Ethereum 2.0?
In late December 2020, Ethereum made an update (which is still gradually in progress) on its Ethereums network.
Get to know what Ethereum is all about.
This new update to the Ethereums network is called the Ethereum 2.0.
What is Ethereum 2.0
Ethereum 2.0 is a crucial update to the Ethereums network or blockchain which started in late December 2020 and will last for 2 years. This update promises to make transactions faster, (theoretically) more secure, and will reduce transactions fees.
This update (ETH 2.0) will also change the way mining is carried out on the Ethereum’s network.
Why is Ethereum 2.0 necessary?
Ethereum 2.0 is intended to solve the inconveniences and bottlenecks ETH 1.0 brings to its network.
As ETH 1.0 (Ethereum’s original version) grew in popularity, it became more difficult and cost-effective for miners to provide a Prove of Work (PoW).
Prove of work is a consensus mechanism used in Ethereum 1.0 to validate and add transactions to the Ethereums blockchain. It is a vital tool in preventing a malicious activity known as Double Spending. This method of validating transactions on Ethereum’s blockchain has proven to have some shortcomings as it increases transactions fees and consumes a lot of computational and electrical power in the process.
A consensus mechanism or algorithm is a method used in preventing double spending in a decentralized network. This method is very popular and commonly adopted in crypto mining. Since the whole point of having a decentralized network for carrying out transactions means that there’s no intermediaries likes banks to carry out verfications, the blockchain uses these mechanism to validate transactions.
ETH 2.0 uses a different type of consensus mechanism known as Prove of Stake. In prove of stake, miners are referred to as validators and instead of contributing computational power, they contribute ETH in a process known as Staking. Long story short, this method of validation will provide faster and cheaper transactions on the network. It also reduces Ethereum’s carbon footprint, since miners will no longer need to consume lots of electrical power on its network.
Should ETH holders worry?
As of 2021, Ethereum’s network consists of both ETH 1.0 and ETH 2.0. The update was programmed to run on the network without causing any harm to the progress of the network.
So if you’re an ETH holder, you need not fret. Your ETH holdings are safe and you can continue your trades and transactions on the ETH network without any worries.
Although ETH miners will have to prepare for the changes about to hit the Ethereum network soon.
