What is Ethereum 2.0?
What does the Ethereum 2.0 upgrade mean for existing users? What do users need to do to upgrade?
The Ethereum ecosystem continues to evolve with the work of the developer team and grow with the support of the community. After the Constantinople and Istanbul hard forks, the ongoing work for Ethereum 2.0 is expected to be completed in the last quarter of 2021 and the transition is expected to take place.
In this process, users are most curious about how Ethereum assets will be affected by this change. Users who buy and sell Ethereum or store Ethereum assets in their BtcTurk | PRO account or their own wallet need to know that all Ethereum assets will continue to be securely stored on the Ethereum blockchain. However, users who mine Ethereum or want to make money with Ethereum need to be prepared for the Ethereum 2.0 process.
Vitalik Buterin shared the roadmap of Ethereum.
Transition from Ethereum to Ethereum 2.0
Ethereum 2.0 started to occupy the agenda of the cryptocurrency ecosystem with the presentation of Vitalik Buterin, one of the founders of Ethereum, at the Ethereum Developers Conference (Devcon) in 2018. The new version of the Ethereum blockchain, which is often the subject of news with delays in the development process, will cause a big change in the Ethereum ecosystem.
Working on the transition to the new Ethereum version, called Serenity, the developer team has managed to make the mandatory updates Constantinople and Istanbul, albeit later than planned. With the completion of 3 stages in total, the transition process will be completed.
With Ethereum 2.0, “Proof of Work” (PoW) consensus will be replaced with “Proof of Stake” consensus. In this way, keeping the Ethereum network running will be more energy efficient.
Mining in the current system will be replaced by Staking, and with Ethereum 2.0 fully active, miners will no longer have a function. By locking down Ethereums in their wallets, users will be able to participate in the “Proof of Stake” settlement and earn passive income.
Stage 0 — Beacon Chain
The first phase, which we can translate as the Flare Chain, will host the “Casper Proof of Stake” protocol. This protocol, which will change the mining method on the Ethereum network, will also provide the transition to the data transport method called “Sharding”. This method, which facilitates the transfer of data by dividing it into parts, will also allow the Ethereum network to scale faster.
The most important point of interest to users in phase 0 will be the simultaneous operation of 2 different Ethereum blockchains. The currently used Ethereum 1 blockchain will run simultaneously with the Ethereum 2.0 blockchain. At this stage, users will be able to start Proof of Stake mining. Users who want to generate income with the Casper Proof of Stake protocol will need to transfer at least 32 Ethereum from the existing chain to the Ethereum 2.0 chain. However, they will not be able to transfer from the Ethereum 2.0 chain to the existing chain until they move to Phase 1.
Stage 1 — Shard Chains
Sharding, which makes it easier to move and process data by dividing it into parts, is a method also used in classical databases. Shard Chains, which allow a large number of transactions to be performed at the same time, are seen as an important stage of scaling in Ethereum 2.0.
In Phase 1, it is aimed to create 64 Split Chains. At this stage, which will be a test phase for Partitioned Chains, the establishment of the partitioning structure, the validity of the data and the operation of the Split Chains between each other will be tested.
As the testing process will continue at this stage, the existing Ethereum blockchain and Ethereum 2.0 blockchain will continue to work in parallel. The amount of Ethereum produced (issued) can be expected to be higher than normal during this process, as the Validators mining Proof-of-Stake will also generate Ethereum revenue. However, production inflation is expected to stabilize, as Phase 1 will also reduce Ethereum production with Proof-of-Work mining (PoW).
With the activation of Sharding, there will be serious decreases in network usage and transfer costs. In this way, it will be possible to produce and transfer smart contracts (tokens) on the Ethereum or Ethereum blockchain at much lower costs.
Stage 2 — State Execution
Phase 2, which is perhaps the most critical phase of the Ethereum 2.0 process, can be considered as Implementation Initiation. Functions that were tested separately in the previous stages will be brought together at this stage. Split Chains will move from simple transaction structure to regular transaction structure and smart contracts will be renewed to work with this structure.
This stage will be an important stage especially for decentralized applications (dApps). In order for their apps to work with Split Chains, decentralized app developers will need to choose the partitions they want to work on and make their apps suitable for running on Split Chains.
All these stages plan the development and change processes to be carried out to enable the transition to Ethereum 2.0. However, it remains unclear when and how the current blockchain, wallets and smart contracts will transit to Ethereum 2.0. Considering the delays experienced in the previous update processes, there may be possible delays in the Ethereum 2.0 transition. If you are not a developer, you must wait for all the steps to be completed to move your Ethereum assets from the existing blockchain to the Ethereum 2.0 blockchain.
Medalla, the official final testnet of Ethereum 2.0, started working with 20,000 participants from all over the world as of August 4, 2020. This testnet will be the final testnet before “Ethereum 2.0 Phase 0”.
Resources:
Ethub — https://docs.ethhub.io/ethereum-roadmap/ethereum-2.0/eth-2.0-phases/
Vitalik Buterin — https://twitter.com/VitalikButerin/status/1240365047421054976
Consensys — https://consensys.net/blog/blockchain-explained/the-roadmap-to-serenity-2/
