Do you think it might be a good idea to follow some crypto enthusiast? Well, I'm your guy.
The transactions are irreversible and self-executing thanks to the smart contract technology and Ethereum currently uses a PoW consensus algorithm similar to Bitcoin but pays ethers (ETH) to the miners and it’s better suited for GPU-mining.
Ethereum’s goal has always been to enable developers to build decentralized applications, DApps. However, Vitalik proposed a major upgrade for Ethereum that includes a shift towards a Proof of Stake consensus algorithm, sharding, and eWASM.
Vitalik Buterin has stated several times that PoS is not only a more sustainable consensus algorithm but that it will also bring Ethereum more security. According to the founder of the digital asset, PoS makes it harder for attackers to make a breach and solves the problem of the abuse of electrical power that PoW is enabling.
The main concern and criticism come from the fact that the algorithm is not entirely random and will give more power to those who are staking more ethers. Either way, Ethereum’s switch to PoS is scheduled to happen somewhere in 2020.
Ethereum team explained in which conditions will Ethereum 2.0 be launched as we can see from this Reddit discussion thread which was posted on February 5. Basically, the network will be launched only
when three clients can run continuously for at least two months
“I have 95% confidence we will launch in 2020.” - stated Justin Drake
Ethereum is currently not scalable and has faced a lot of issues with tokens. There have been several instances when one single project was able to clog up the entire Ethereum network slowing transactions for everyone involved with ETH.
The new version of Ethereum will try to solve the scalability issue through a few different solutions including sharding and plasma. Sharding, generally, means splitting a database into smaller parts, this will help with scalability as well as transaction speed for Ethereum.
1) Plasma is basically an extra layer on top of the network and it’s able to handle enormous amounts of transactions. These are secondary chains that communicate with the main chain, each sub-chain can be customized to serve different needs.
2) Raiden is also an off-chain scaling solution that allows users to perform ERC-20 token transfers on the Ethereum blockchain with low fees and near-instant transactions. There are no small enough transactions that cannot be sent efficiently using the Raiden Network even if they are split over hundreds of micropayments.
Ethereum 2.0 includes many other ideas and upgrades, some are already implemented. Another crucial update for Ethereum is the transition from the EVM to eWASM. EVM stands for Ethereum Virtual Machine which facilitates transactions on the network like the execution of smart
One of the benefits of this transition is a significant increase in speed and efficiency. eWASM will greatly increase the number of transactions processed per second as Ethereum can only currently handle around 15-20 transactions per second. However, one of the bullish signals for Ether is the growth in the number of miners holding Ether. So we are still good right now.
Although Ethereum 2.0 is great and includes a ton of great upgrades, there is also a downside, most notably when it comes to recalling data about the Ethereum blockchain. Developers will face increased transaction costs when recalling and accessing data but they can limit those increases according to Vitalik Buterin.
Additionally, developers will also lose the ability to execute transactions ‘atomically’. Since the new Ethereum will be composed of different shards this will introduce a new dynamic for dApp developers as a specific shard cannot know the state of another one instantly.
It’s important to note that Ethereum 2.0 is a ‘work-in-progress’ even according to Vitalik and that a lot of things can still change. For instance, originally, the new Ethereum version was envisioned to have around 1,024 shards but Vitalik has recently proposed to have only 64.
Ethereum 2.0 might take many years to actually be completed, even the co-founder of Ethereum admits it, however, upgrades are completed regularly and they are already helping the digital asset.
Even though there are some disadvantages coming out of the new version, ultimately, Ethereum will be far more scalable, faster and more efficient.
There are still new ideas being proposed every day as Ethereum keeps improving every single day thanks to a wide variety of programmers working really hard on the project.
Even though Ethereum has issues that need to be addressed, the digital asset remains the top 2 by market capitalization and continues to gain adoption every single day.
Create your free account to unlock your custom reading experience.