Ethereum 2.0
What is Ethereum 2.0 all about?
Ethereum 2.0 aka “Serenity” is basically an improved version of Ethereum that will replace the “proof of work” consensus model with the “proof of stake” consensus model to verify transactions via staking. Once the proof of work is replaced, it will drastically reduce electricity consumption which is used in the mining process to verify Ethereum transactions. To be precise, Ethereum's energy consumption will be reduced by ~99.95% following The Merge from proof-of-work (PoW) to proof-of-stake (PoS).
Staking requires users to bring in a certain amount of cryptocurrency to engage in the transaction verification process, becoming the validator. Validators must stake at least 32 ETH to be eligible as an Ethereum validator, while the more cryptocurrency staked by the validator increases the chance to be the chosen validator to produce a block which will be rewarded in ETH in return.
Has Ethereum 2.0 been launched?
The Beacon Chain (ETH2) which was launched in December 2020 has been working in tandem and parallel with Ethereum Mainnet Blockchain (ETH1) ever since. Later, The two will be merged into one unified blockchain following continuous improvements and adjustments along the way.
However, the official merger is expected to take place in September 2020 followed by many more improvements which will expand Ethereum’s capacity to process transactions and store data.
Will Ethereum 2.0 be the same as Ethereum?
As introduced, when the official merge takes place, Ethereum’s old consensus model “Proof of work” will be changed to “Proof of stake” with the main aim to reduce electricity consumption and increase the transaction process. This also fundamentally changes Ethereum’s security protocol entirely.
Is Ethereum 2.0 better than Ethereum?
Ethereum 2.0 is expected to handle 100,000 transactions per second compared to the 15 transactions per second of the current Ethereum. This doesn’t only reduce transaction cost but also improve tremendous transaction speed at the same time. Moreover, changing to the PoS consensus protocol is also expected to reduce hacking incidents which were aimed at any loophole opening in the blockchain in the past.
Not to mention that Ethereum 2.0 will inarguably become more eco-friendly due to the new consensus model addressed.
What happens to my ETH when ETH 2.0 comes out?
When the merge takes place, your existing ETH tokens will be able to transfer to the Ethereum 2.0 Chain at an identical price. Also, your ETH tokens which are held on the current Ethereum chain will be accessible on the Ethereum 2.0 chain. So, don’t worry that your token will disappear.
Will ETH 2.0 reduce gas fees?
This has been a controversial issue over the internet for the whole time. Unfortunately, the recent update from the Ethereum foundation mentioned that the gas fee will remain unchanged even after the merge.
However, keep posted on the update in case there is a change in the gas fee since the merge is expected to happen soon.
Will Ethereum 2.0 be a new coin?
Ethereum 2.0 release doesn’t introduce a new coin. It is simply an upgrade of the consensus model which doesn’t have an effect on the actual value of the ETH token and will not change the amount of ETH you are holding.
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