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What Is “Ethereum 2.0” and Will It Solve Crypto’s Problems?

WindAwake /

Next major revision of Ethereum crypto networkOften referred to as “ETH 2.0”, it promises to address some of its greatest criticisms. High GPU price To Environmental pollution.. Let’s take a look at the proposed changes and what they mean for the future of cryptography.

What is Ethereum 2.0? When will you arrive?

Ethereum 2.0 is a commonly used term that usually describes the long-awaited switch from Ethereum’s Proof of Work to Proof of Stake. This promises to eliminate Ethereum mining. As of January 24, 2022, Ethereum Foundation No longer referenced To this upgrade as “Eth 2” or “Ethereum 2.0”. Instead, the Foundation calls it “merging” and “docking.”

As explained below, GPUs are more expensive and criticized by environmentalists as the Ethereum network relies on computing power to provide consensus (the “proof of work”). These issues have recently taken on new urgency with mainstream adoption. NFTMany use Ethereum smart contracts to validate tokens that link to works of art. Moving to Proof of Stake, which does not require GPU mining, is expected to solve some of these issues.

The transition to Ethereum 2.0 has been promised for years and Claim now It will eventually happen in the second quarter of 2022.

A brief review of Ethereum 1.0

If you are not very familiar EthereumYou can conceptualize it by imagining a huge distributed virtual computer running on the Internet.If you have used an emulator Run old MS-DOS games Or virtualization to run Windows on Mac, You have come across a similar principle. In both cases, the programmable virtual computer was running as software (rather than hardware) on another platform.

Unlike virtual machines that run on a single PC, Ethereum Thousands of computers (Called a node) Blockchain.. These nodes can run “smart contracts,” programs that run on Ethereum virtual computers. Also, because Ethereum is dynamic and distributed, virtual machines can shrink or grow in size at any time when a node joins or leaves the network.

Payments on Ethereum (a cryptocurrency that runs as one of the applications on the Ethereum network) have the computing power to run these nodes and execute smart contracts to check the chronological order of transactions (the order of transactions). Gives people an incentive to provide (called “mining”) on the Ethereum blockchain. The verification process is “consensus.. “

Ethereum issues today

To understand the need for an Ethereum upgrade, you need to understand the current shortcomings of Ethereum.Ethereum architects and experts alike Pointed out some major issues How Ethereum works, and they generally see these issues as hindering the wider growth of Ethereum applications. Here are some important issues:

  • High gas charges: “Gas” drives the Ethereum network.that is Fees paid to miners Provides computing power to run the network. Gas prices are variable market prices based on the demand for resources on the Ethereum network. The higher the demand, the higher the gas price. The more gas someone is willing to pay, the faster the transaction will run. This means that as the popularity of Ethereum applications soars, gas prices can rise exorbitantly and can cost more to execute a transaction than the value of the token being traded. For example, at certain times, the gas price for purchasing a low-cost NFT may be higher than the price of the NFT itself.
  • Power usage: Currently, establishing consensus on the Ethereum blockchain is based on a crypto puzzle that must be solved by nodes on the Ethereum network called “Proof of Work”. The more popular Ethereum is, the more computational work is required to validate the blockchain, and the more power the nodes on the network will use.That in turn inspired Frequent criticism Running the Ethereum network creates pollution that damages our natural environment.
  • Disk space usage: The larger the size of the Ethereum network, the more difficult it is to run the node due to the history of the Ethereum blockchain. Occupies more disk space.. This limits the users who can run the full node (because of the higher cost of running) and limits the number of nodes on the network.
  • Network congestion: With a lot of computation, if Ethereum is inefficient, the communication between the nodes will congest the network and slow down the execution of smart contracts. This congestion limits the complexity of applications that can reasonably run on Ethereum networks.
  • GPU price: Ethereum consensus algorithm (“Esash“)It has been Specially designed You can profit from mining with a consumer graphics card. The higher the demand for calculations on the Ethereum network, the more miners may be paid (at gas rates) and the more GPUs they want to buy to make more money. Second, this can lead to a GPU shortage. Soaring graphics card prices.. The high price of GPUs has a dramatic impact on other GPU applications such as games and neural networks.

Related: Why is it difficult to buy a graphics card in 2021?

Proposed solution

Ethereum "merge" artwork

The Ethereum Foundation and Vitalik Buterin, the creator of Ethereum, have been aware of some of the above shortcomings since Ethereum. 2013 start (And launched in 2015.) However, as the network became more popular, it became more difficult to implement upgrades and improvements.Change to network At least 51% of Ethereum nodes are required to agree To them (if all nodes disagree) Network fork, Or split into multiple networks). Let’s see how “merge” and other upgrades are changed to resolve some of these.

Switch to Proof of Stake

After the “merger”, Ethereum will no longer create a consensus through Proof of Work, which requires computational power and power. From the miner..Instead, it takes advantage Proof of stake algorithm This requires the validation node to risk (or “bet”) a certain amount of Ethereum cryptocurrency in order to validate the blocks on the Ethereum blockchain.

Validators are randomly selected to create new blocks on the chain (transaction validation and smart contract execution). If you disconnect or provide the wrong value in the middle of the process, you may lose some or all of the bet Ether. Risks provide an incentive to do the right thing, and validators continue to be paid for working with Ether.

Under Proof of Stake, validators need to do some calculations to create blocks on the Ethereum blockchain, but not as much as if they were forced to solve a crypto puzzle. As a result, Proof of Stake significantly reduces the energy usage of the Ethereum network and lowers barriers to entry (no expensive, rugged GPU is required to obtain the cipher as a validator). A network because it makes it easier to be part of a node pool.More nodes with more computing power Less centralizedStrengthen network security.

Switching Ethereum to Proof of Stake is expected to ease GPU demand, but GPU mining as miners who previously mined Ethereum will adapt their existing mining hardware and methods to other cryptocurrencies. May continue to be used. If the demand for GPUs declines, the price of graphics cards may drop slightly, Other factors during play Shortage of current graphics cards.

Switching Ethereum to Proof of Stake is a multi-step process that has already begun. Beacon chain— A type of parallel consensus layer based on Staking Ethereum — eventually integrated with the main Ethereum network. That’s why it was named “Merge”.

Adoption of sharding

After the “merge”, Ethereum developers plan to introduce another major upgrade called “sharding” that splits the main Ethereum blockchain into smaller chains called “shards”.

Currently, the entire history of Ethereum blockchain is covered. 4 terabytes of space..Full node is not necesary to Host this full amount, but with the new plan, the active chain Divided into 64 piecesTherefore, each node only needs to host 1/64 of the traditional size of the Ethereum blockchain.

Sharding is expected to lower the barriers to entry for running nodes by lowering hardware requirements. As a result, you can increase the number of nodes and increase the capacity of your network.Sharding too Increase the number of transactions The Ethereum network can be handled by distributing the load to more nodes. This can help lower gas prices.

Sharding is expected to come to the Ethereum network Sometime in 2023There is no fixed date yet.

Will Ethereum 2.0 reduce gas prices?

Ethereum coin.
AlekseyIvanov /

With Ethereum 2.0 now having different meanings and being divided into different goals over time, it is a difficult question to answer with confidence whether gas prices can be reduced.

I have Many skeptics The Ethereum community has promised to lower gas prices by switching to Proof of Stake (“merge”), and the Ethereum Foundation has not promised to do so.Gas price is Based on demand, And each Ethereum block has finite room for computation. Instead, sharding could reduce charges by increasing the computing power of the Ethereum network, but it is not expected to be brought to the main Ethereum chain until at least 2023.

Instead, Some experts We hope that Ethereum’s gas tariff cuts may have to go down to what is called “Layer 2” application It is built on the Ethereum network and performs some of its own computational work, but relies on Ethereum for a basic level of consensus and validation.

Needless to say, the whole issue of Ethereum upgrades and their effectiveness is complex and is based on a set of dynamic conditions such as network size, Ethereum value, NFT demand, and node operator mood. — It can change a lot every day. Over time, we will see how it all happens and how Ethereum changes will affect the wider world of cryptography.

But if you have to guess, switching Ethereum to Proof of Stake is widely expected to be a breakthrough move. If it is imitated by future cryptocurrencies, the Switch may even remove barriers that prevent some organizations or governments from fully accepting cryptocurrencies. It, in turn, can dramatically expand their adoption and make the future a very crypto-friendly place.

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