One of the most widespread decentralized blockchain technologies, the Ethereum network, underwent a significant transformation in September 2022 when it shifted from a PoW to a PoS mechanism. The transition has resulted in Ethereum 2.0 having a smaller energy footprint, faster transaction times, and enhanced scalability, paramount for its growth and development.
Ethereum’s native cryptocurrency, Ether (ETH), is widely adopted and recognized, and the platform’s scalability, security, programmability, and decentralization factors make it a favored choice for enterprise and developer-led technological solutions. The development of Ethereum 2.0 has been ongoing for years and has resulted in technical advancements and issue resolutions within the ETH blockchain technology. Ethereum natively features smart contracts, an essential component of decentralized applications. The launch of the Beacon Chain in December 2020 has been an important milestone in the platform’s upgrade process.
Highlighting The Top 3 Differences
- Sharding: Sharding is a typical programming approach that distributes data over numerous processors, resulting in higher processing performance. With Ethereum 2.0, 64 shards were introduced to divide the workload among many databases. Sharding addresses Ethereum’s scalability difficulties since the original Ethereum could only handle 15 transactions per second, but Ethereum 2.0 can handle up to 100,000 transactions per second. Consider the original Ethereum blockchain to be a busy motorway with only one lane, but with the latest update, 63 more lanes have been created, increasing traffic flow.
- Changes to the Consensus Mechanism: The ETH blockchain has switched from Proof of Work to Proof of Stake, which randomly picks ETH holders to participate as validators. To become a validator, you must stake at least 32 ETH. Holders with smaller amounts can join staking pools with others. To safeguard the blockchain from fraud, any validator detected supporting illegal transactions will have their staked money deducted. PoS is a long-term solution that supports a more decentralized blockchain by letting everyone with a specific amount of ETH participate in mining new tokens.
- Beacon Chain: The distinction between Ethereum 2.0 and ETH is that all 64 chains are connected to a blockchain called the Beacon Chain. Its core component manages the whole network and facilitates transactions across the ecosystem. It is in charge of randomly picking and monitoring the next validator and deducting the staked amount in the event of exploitative conduct. This random selection assures that the system is not biased against certain individuals. In brief, the Beacon Chain serves as the brain of the Ethereum 2.0 network:
Final Takeaways
Proof-of-stake uses far fewer resources than proof-of-work, resulting in quicker transaction speeds and reduced energy use. Although the network is currently processing 12 transactions per second as of March 2023, developers have ensured that it will eventually be capable of processing 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.” Ethereum has switched to Proof of Stake (PoS), regarded as its most important change. The Ethereum Foundation compared this upgrade to equipping a starship with a new engine and strengthening its hull in preparation for interplanetary flight.