The crypto industry is growing by the minute; every day we see many new crypto projects being covered by crypto websites and blogs. Currently, Ethereum (ETH) 2.0 is the hot topic around the crypto society. In this article, we’re going to discuss ETH 2.0 and its upside potential in detail.
What exactly is Ethereum 2.0?
Ethereum 2.0, also known as ‘’Serenity’’ or ‘’Eth2’’, is the latest update to the Ethereum blockchain, which will be released gradually in different phases, with the Phase 0 starting in 2020. Each phase will add improved performance and functionality to Ethereum in many different ways. The Phase 0 will unveil the beacon chain that will manage the validators’ registry and implement Proof of Stake (PoS).
Difference Between ETH 1.0 and ETH 2.0?
There’re two major improvements introduced by the Ethereum 2.0: Shard Chains and Proof of Stake – both of them aren’t present in Ethereum 1.0.
Proof of Stake
Currently, the Ethereum 1.0 network is run by a consensus mechanism called Proof of Work (PoW), which relies on electricity (work) and physical computing power (miners) to build and verify blocks on the blockchain. PoS or Proof of Stake is an upgrade that allows improved scalability, security, and energy efficient. Unlike PoW that relies on electricity and physical miners, PoS relies on virtual miners (validators) and Ether deposits.
Shard chains are a new scalability mechanism aimed at adding more scalability to the Ethereum platform. This mechanism goes a long way toward improving the throughput of the Ethereum network and allows the transactions to be processed quickly at the same time rather than consecutively. It’s expected that Shard Chains will be introduced in Phase 1.
How Will Ethereum 2.0 Affect Price?
Plasma, eWASM, and Sharding will speed up the transactions, making the blockchain network more efficient and accurate than ever before. The increase in transactions per second is expected to stimulate crypto traders and investors to hold ETH and transfer it around digital exchanges at affordable fees. This has the potential to put ETH in high demand. This is why many experts within the crypto society think Ethereum 2.0 may cause long term growth in the price of ETH in the years to come.