Ethereum 2.0

1 December, biggest update in Ethereum’s history will begin its first phase on

Ethereum 2.0’s Beacon Chain’s launch has been set for Dec. 1 at 12:00 UTC.

The backbone of Ethereum 2.0, the Beacon chain is an interim blockchain that will operate alongside the current network as it begins the first of four migration phases to the new network.

following the transfer of 524,288 Ether (ETH) from 16,384 validators into the Eth2 deposit contract since it went live on Nov. 4.

Despite early concerns stemming from low staking participation, transfers to the deposit contract rapidly increased over the past day, with more than 200,000 ETH sent to the contract in the past 14 hours.

ETH’s price ran up in anticipation of the upgrade and is currently resting just above $600.

While genesis participants will not be able to withdraw their coins until ETH 2.0 reaches Phase 1.5 — which will merge the Ethereum mainnet with Eth2’s beacon chain and sharded environment — many hodlers are waiting for third parties to launch withdrawal-enabled staking services, despite the potential risk of exit scams.

The deposit contract’s threshold was met with roughly nine hours to go until its deadline.

What is Ethereum 2.0?

Ethereum 2.0, also known as Eth2 or “Serenity”, is an upgrade to the Ethereum blockchain. The upgrade aims to enhance the speed, efficiency, and scalability of the Ethereum network so that it can process more transactions and ease bottlenecks.

Ethereum 2.0 is launching in several phases, with the first upgrade expected to launch towards the end of 2020. 

How does Ethereum 2.0 differ from Ethereum?

While Ethereum 1.0 uses a consensus mechanism known as proof of work (PoW), Ethereum 2.0 will use a proof of stake (PoS) mechanism. 

How does proof of stake differ from proof of work?

With blockchains such as Ethereum, there is a need to validate transactions in a decentralized way. Ethereum, like other cryptocurrencies, currently uses a consensus mechanism known as proof of work (PoW).

In this system, miners use computer hardware processing power to solve complex mathematical puzzles and verify new transactions. The first miner to solve a puzzle adds a new transaction to the record of all transactions that make up the blockchain. They are then rewarded with cryptocoins. However, this process can be energy-intensive.

Proof of stake (PoS) differs in that instead of miners, transaction validators stake crypto for the right to verify a transaction. These validators are selected to propose a block based on how much crypto they hold, and how long they’ve held it for.

Other validators can then attest that they have seen a block. When there are enough attestations, a block can be added to the blockchain. Validators then are rewarded for the successful block proposition. This process is known as “forging” or “minting”.

The main advantage of PoS is that it is far more energy-efficient than PoW, as it decouples energy-intensive computer processing from the consensus algorithm. It also means that you don’t need a lot of computing power to secure the blockchain.

How will Ethereum 2.0 scale better than Ethereum 1.0?

One of the main reasons for the upgrade to Ethereum 2.0 is scalability. With Ethereum 1.0, the network can only support around 30 transactions per second; this causes delays and congestion. Ethereum 2.0 promises up to 100,000 transactions per second. This increase will be achieved through the implementation of shard chains.

How will Ethereum 2.0 be more secure?

Ethereum 2.0 has been devised with security in mind. Most proof of stake networks have a small set of validators, which makes for a more centralized system and decreased network security. Ethereum 2.0 requires a minimum of 16,384 validators, making it much more decentralized—and hence, secure.