Ethereum 2.0 Meaning
The term “Ethereum 2.0” refers to an ongoing set of upgrades to the Ethereum network designed to tackle some of its pressing issues, including scalability, security, transaction throughput, accessibility, and transitioning to a more energy-efficient consensus proof-of-stake algorithm.
Ethereum 2.0 Explained
Like most blockchains, the Ethereum network also faces the blockchain trilemma, where achieving one design principle involves a tradeoff. Blockchain trilemma is the concept that it’s difficult for a blockchain to find a balance between its three defining factors: scalability, decentralization, and security.
To tackle Ethereum’s scalability issues and enhance its speed, security, and accessibility, the Ethereum Foundation outlined a series of network upgrades called Ethereum 2.0 (also known as Serenity), which includes the Beacon Chain, Sharding, and Merge. The most notable upgrade made to the network was the shift from proof-of-work consensus to proof-of-stake consensus. The PoS allows Ethereum to be significantly more energy-efficient, scalable, and accessible.
The developers later renamed Ethereum 2.0 or Eth2 to Ethereum upgrades to avoid confusing users and to create staking clarity. Eth1 refers to the execution layer that handles transactions, while Eth2 is the consensus layer handling proof-of-stake consensus.
When will Ethereum 2.0 launch?
The Ethereum network’s transition is multi-phased. These phases include:
- Phase 0: Phase 0 introduced the Beacon Chain, launched on December 1, 2020. The Beacon Chain, which existed adjacent to the mainnet and currently coordinates with the PoS Ethereum, brought staking to the network and laid the foundation for future upgrades.
- Phase 1: Phase 1 introduced The Merge, which involved merging the Mainnet into the PoS Beacon Chain, on September 15, 2022. It also introduces sharding, where the blockchain will be divided into smaller chains called shards. Dividing Ethereum into 64 shards means that the network’s load is spread across 64 chains, expanding the network’s data storage capacity and reducing network congestion. Sharding is estimated to take effect between 2023 and 2024.
- Phase 2: Phase 2 will mark the transition to eWASM or Ethereum WebAssembly from the current Ethereum Virtual Machine (EVM). The eWASM will speed up processes within the network and make development more accessible since it is compatible with basic programming languages and compiles and executes code much faster than EVM. However, the developers are still uncertain when the upgrade will take effect.