Ethereum, a blockchain network utilizing decentralized blockchain technology, recently transitioned from PoW to PoS mechanism in September 2022. As a result, Ethereum 2.0 now offers a smaller energy footprint, increased scalability, and faster transaction times. This transition is crucial to Ethereum’s growth and development.
Ether (ETH), Ethereum’s native cryptocurrency, is widely recognized and used. Ethereum’s scalability, programmability, security, and decentralization make it the preferred blockchain for enterprise and developer-led technological solutions. The development of Ethereum 2.0, which has been underway for many years, has led to improvements in ETH blockchain technology, resolving technical issues. Ethereum natively supports smart contracts, a vital feature of decentralized applications. The Beacon Chain, which was officially launched in December 2020, was a step forward in the upgrade process.
Ethereum, the second-largest cryptocurrency by market capitalization, has undergone significant changes to become Ethereum 2.0. This upgrade is expected to address some of the network’s most serious issues while improving its scalability and security. To be a validator, you must stake at least 32 ETH. To protect the blockchain from fraud, any validator caught endorsing illegal transactions would have their staked funds slashed. PoS is a more sustainable strategy that fosters a more decentralized blockchain by letting anybody with a specific amount of ETH participate in mining new tokens.
Sharding is yet another big enhancement of Ethereum 2.0 over the original ETH. Sharding is a common programming approach that distributes data across numerous processors, resulting in quicker processing speed. In the case of ETH, 64 shards were developed to spread the workload over multiple databases. Each shard is a separate chain linked to the original Ethereum chain to access previously recorded data. Sharding addresses Ethereum’s scalability difficulties, as the original ETH could only handle 15 transactions per second, whereas Ethereum 2.0 can handle up to 100,000 transactions per second.
The Beacon Chain is a single blockchain that governs the whole network and allows transactions throughout the ecosystem. It is in charge of choosing and monitoring the next validator at random and deducting the staked amount in the event of any exploitative activity. The random selection of validators ensures the system is not biased against particular players.
Final Words About Upcoming Changes
Proof-of-stake consumes much fewer resources than proof-of-work, leading to faster transaction speeds and lower energy use. Although the network is currently processing 12 transactions per second as of March 2023, developers have ensured an eventual capacity of 100,000 transactions per second by implementing updates such as Proto-Dnaksharding and Danksharding, which introduce distributed data selection and may replace rollups with “blobs.”