This digital currency is currently the second largest in this crypto world after Bitcoin. Vitalik Buterin, the founder of Ethereum, recently announced in 2020 that the network would go through changes. A new form of Ethereum will be launching soon, Ethereum 2.0. and this new launch will be a new game-changer. Since its announcement, many Ethereum investors and cryptocurrency enthusiasts have been wondering when is Ethereum 2.0 coming out?
Every day, the crypto world grows in popularity across the globe. With relentless efforts and improvements in their features and strategies, all crypto companies constantly strive to be the best and scale the highest. They want to be the best competitor for other crypto projects globally. Among other well-known cryptocurrencies, Bitcoin, Ethereum, and Stellar had their benefit hype train to promote. If you have been following the crypto industry for a while, you definitely might have heard of this very popular cryptocurrency, Ethereum.
What is Ethereum 2.0?
Ethereum 2.0, also termed as Serenity or ETH 2.0, is an upgraded version of Ethereum with improved working, speed, scalability, and efficiency of the network. If the developers face some problems on the web, this new ETH 2.0 will bring an accurate solution to them. Its main aim is to increase Ethereum’s transaction capacity, lower fees, and make the network more sustainable.
It follows the Proof-of-stake model that allows Ethereum investors for faster transactions and reduces expenses. Ethereum investors can now stake their holdings on Kraken, Coinbase, and Binance, among other popular exchanges. The current transaction cost on Ethereum’s network is extremely high, preventing many people from using it.
Launching of Ethereum 2.0
Ethereum 2.0 will be launching in various phases, with the first phase known as the Beacon Chain, which went live on December 1, 2020. The Merge, the second phase of Ethereum 2.0, will combine the Beacon Chain with the Ethereum main net. It is expected to happen in the first or second quarter of 2022. Shard Chains, the final phase of Ethereum 2.0, will play a critical role in scaling the Ethereum network. It allows the transactions to distribute across 64 different chains instead of running on a single blockchain.
What is the difference between Ethereum 1.0 and Ethereum 2.0?
Ethereum 1.0 and Ethereum 2.0 are two different digital currencies. ETH 2.0 is, however, very much upgraded and more efficient than Ethereum. The two versions have two significant differences, Ethereum 1.0 uses the Proof of Work model, and Ethereum 2.0 uses the Proof of Stake model. Miners use a lot of electricity and physical computing power in Proof of Work to add new blocks to the Ethereum blockchain.
Proof of stake
Whereas in Proof of Stake, validators must deposit a certain amount of Ether to be considered for adding new blocks to the blockchain. New Proof of Stack has many benefits than the previous Proof of Work for Ethereum users, like enhanced energy efficiency, power, and security. Ethereum was created with intelligent contracts and Dapps in mind. Another significant difference between ETH 1.0 and ETH 2.0 is Sharding. It is the dividing of a blockchain into smaller shards means multiple blockchains.
Enhance the efficency
Sharding helps increase the efficiency of the network by allowing validators to keep track of their own Shard’s information. Complex data is divided among many nodes and processed in parallel rather than sequentially, allowing faster transactions. To avoid manipulation and strengthen the network’s security, validators will be shuffled between shards with communication using the Beacon Chain. Eth 2.0 will have 64 shards in its initial structure. As a result, each ShardShard represents an opportunity for a shard Validator to add a block and receive a reward to the fastest miner.
When will Ethereum 2.0 launch?
The developers of Ethereum decided to launch this new version of Ethereum, which is named Ethereum 2.0, on December 1, 2020, after first announcing the news in early 2020. However, that first launch was not the complete Ethereum 2.0, which means this new upgrade is reportedly divided into 3 phrases.
The first phase, called the Phrase 0, was launched in 2020, whereas phase 1 was launched in 2021, and phase 2 is still in the queue to be launched later in the year 2022. The newer model of the Proof of Stake mechanism and the Beacon Chain execution were included in Phase 0. However, Proof of Work will not be completely phased out; it will continue to coexist with Proof of Stake as Proof of Stake is the upgraded version of Proof of Work.
In the second quarter of 2021, Phase 1 was also launched. In the second phase, called Phase 1, the Beacon Chain will merge with the Ethereum network, and Proof of Work will be phased out for sure this time. And the users who staked their Ethereum on the Beacon Chain will be assigned the roles of validators. Phase 2 is the final phase, and it is where Shard Chains will be introduced to the Ethereum network. It will launch somewhat in the second phase of 2022. This is also the time when Ethereum 2.0 will be fully operational. Shard Chains will be critical to the Ethereum network’s scaling. Instead of running on a single blockchain, the transactions are distributed across 64 different chains.
What will happen when Ethereum 2.0 comes out?
Vitalik Buterin, the founder of Ethereum, promised that this new upgrade would bring many positive changes to the blockchain during its announcement. As a result, traders and investors can anticipate positive outcomes from the new Ethereum 2.0 upgrade. Here are some of the things to look forward to once Ethereum 2.0 is released.
Ethereum will now more be energy-efficient, approximately 99.9%. Proof of Stake will take replace of Proof of Work. It will no longer take a lot of energy to add new blocks to the Ethereum blockchain. Sharding will be implemented in Phase 1 of the Ethereum network to decentralize it further. Everyone will be able to use Ethereum on their personal devices. This was possible because of Sharding, which will increase the number of validators on the Ethereum network. This feature will definitely increase the demand for Ether coins.
Advantage of new upgraded version
One of the significant advantages that the new upgraded version of Ethereum Network users is increased security. It will be much more difficult to compromise the Ethereum network after the upgrade. All the existing Ethereum 2.0 apps will simply migrate to Ethereum 2.0 without losing data during the transaction.
More transactions per second will be processed with Sharding, lowering transaction costs. With the release of Ethereum 2.0 phase 2, the proof-work mining structure will be phased out in favour of staking. Miners will have to replace staking to validate transactions for block rewards and transaction fees, rendering the traditional mining system obsolete.
Is Ethereum 2.0 a new coin?
Ethereum 2.0 is not a new coin, and your ETH holdings will remain unchanged. ETH 2.0 is simply an upgrade to the Ethereum blockchain that will improve the Ethereum network. It is more likely to affect Ethereum miners than holders, as they move to the Proof of Stake model will use staking rather than mining to approve transactions on the Ethereum blockchain.
Ethereum 2.0 is an upgraded Ethereum system that introduces new ways to operate. Ethereum 2.0 aims to increase transaction speed and efficiency while increasing the number of transactions. There is no change in the price, and the difference only persists in the features only.
What will happen to the previous Ethereum 1.0?
You don’t have to do anything with your Ethereum 1.0 if you’re only a holder, trader, or using it on apps. Your funds and data will be automatically be transferred to Ethereum 2.0 in that case. You can participate in Phase 0 if you want to start taking on a new Ethereum 2.0. If you have 32 Ethereum to deposit, you can join as a validator at any time. Starting at genesis, validators can commit their funds to the blockchain.
The possibility of higher block rewards is the incentive. You don’t need to be concerned about the ETH1 you currently possess. You also don’t need to do anything special with it. Even after the changing from Proof of Work to Proof of Stake, you can continue to use them on Ethereum. It will automatically transfer the previous version data to the newer one without losing it.
In the above article, we have answers to some most asked questions like when Ethereum 2.0 launched. The first phase of Ethereum 2.0, called the Phrase 0, was launched in 2020, whereas phase 1 was established in 2021, and phase 2 is still in the queue to be found later in the year 2022.
This new upgrade would bring many positive changes to the blockchain during its announcement. ETH 2.0 is not a new coin, and your ETH holdings will remain unchanged even after the execution of this more recent version.