Has the cryptocurrency industry finally been resuscitated after several months of bearish news?
Prices are on the rise, investors are returning to the market, protocols and tokens are improving, and updates are coming to certain digital currencies.
One of these is the launch of Ethereum 2.
Wait a minute. There is a second edition of the world’s second-largest cryptocurrency?
Yes, and it is coming soon!
After three years of delays and waiting – Ethereum 2.0 was initially expected to be launched in 2019 – the launch date has been formally announced.
Ethereum Foundation has announced the launch date of Ethereum 2.0 will occur sometime on Sept. 15 and 16 this year. ETH 2.0 is being live-tested on test-net, and traders are already staking more than 12 million ETH.
The primary specifications of ETH 2.0, which were led and coordinated by the Ethereum Foundation research team, are being maintained on the Ethereum Foundation GitHub pages. Five independent teams have been involved in building ETH 2.0 as different programming languages have been utilized. This has allowed the development of a plethora of design improvements.
Indeed, the upgrade will make crypto more scalable, secure, and sustainable. It is important to note that ETH 2.0 is not a new coin. Therefore, there will be no change for investors or holders who already possess the virtual token. The upgrade will primarily affect miners more than holders as the shift to PoS will see staking take over mining.
There will be two significant improvements in ETH 2.0 compared to ETH 1.0. Ethereum 1.0 runs on PoW that relies on physical computing power and electricity to build blocks on the blockchain. ETH 2.0 will run on PoS, providing greater security and energy efficiency. The second advancement is related to shard chains which are expected to improve processing time and allow transactions to be processed in parallel rather than consecutively.
ETH 2.0, also known as Serenity, will transition away from Proof-of-Work (PoW) algorithms that are also commonly used in Bitcoin mining. A PoW cryptocurrency is when the network is secured by energy-intensive hashing algorithms. However, many believe that PoW is now antiquated technology as it has several limitations. ETH 2.0 will move to Proof-of-Stakes (PoS) and Ethereum staking. This will shift the blockchain to PoS and cut current energy consumption in half.
In addition, ETH 2.0 has three core elements. These will consist of The Beacon Chain, The Merge, and the Shard chains. The Beacon Chain already went live in December 2021. The Merge is expected to go live in September 2022, and the Shard chains are expected to be functional in 2023.
Since its initial launch in July 2015, Ethereum has been in routine development. Over the last seven years, there have been four crucial upgrades. They consist of Homestead in March 2016, Metropolis Byzantium in October 2017, Metropolis Constantinople in February 2019, and Istanbul in December 2019.
Essentially, the myriad of upgrades has paved the way for ETH 2.0.
Not only is this an important development for the cryptocurrency, but many market experts also forecast that ETH might overtake Bitcoin as the chief cryptocurrency in the future.
The reason? ETH 2.0 has the ability to run automated programs that can execute actions if certain conditions are met. These smart contracts are believed to be the backbone of decentralized finance and will allow people who do not have bank accounts to still conduct financial transactions.
Ethereum is trading at around $1,900 USD per coin, down about 50 percent year-to-date. Like many major cryptocurrencies, the bright side is that Ethereum is enjoying upward momentum.
The Ethereum network boasts more than 120 million ETH coins in circulation with a market capitalization value of $366 million.
The expected launch of ETH 2.0 will likely provide more growth to Ethereum. The core objectives of the upgrade are to address challenges like congestion, scalability, and high fees. These have been concerns for Ethereum users, and ETH 2.0 is expected to resolve these issues.
The core achievement would be the shift from energy hunger PoW to a greener, more energy-efficient PoS. The upgrade will allow the Ethereum network to execute more transactions without logjams.
Many people have questioned the necessity of the upgrade, especially in light of the delay. However, the Ethereum Foundation’s research team believes the upgrade can address several structural challenges. These include the inability to process a large number of transactions, grapple with high transaction fees, diminish clogged systems, combat expensive PoW mechanisms, and reduce the negative impact on the environment.
ETH 2.0 will solve these issues and make Ethereum, a smart contract-enabled blockchain, faster and more efficient moving forward.
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