Ethereum 2.0, known as Serenity, is an upgrade to Ethereum on multiple levels. Its primary goal is to increase Ethereum Transaction speed and capacity by reducing fees and making the network sustainable. Furthermore, the change in the consensus algorithm will minimize power consumption.
Moving to Proof-of-Stake
For now, all the blockchains are operating over the proof-of-work mechanism that takes more time and consumes more power. In this process, miners compete against each other to solve a computation puzzle to win a reward.
Ethereum 2.0 has transited to Proof of Stake to speed up transactions with lower fees. With the PoS, the consensus reached out to the node that has maximum Staking Ethers. When a node gets selected, the next block of the chain is added and the Miner with the high volume of staking wins a reward.
There, you might have confusion in your mind that a miner with a large staking pool will always win a reward. To overcome this confusion, the winning criteria also count the time coins staked.
Some PoS based blockchain has a module that randomizes processes so older and large stakes do not win. There, miners get replaced by the people who stake their coins. Moreover, individuals can stake their coins individually or in staking pools to enhance their chances to win the rewards.
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What’s Ethereum 2.0 Bringing New?
With the increase in the adaptation of blockchain technologies, there is a need to enhance the efficiency of blockchain solutions. Moreover, nodes are vital elements of a network that store data, and it is a hard task to handle thousands of transactions per second without increasing the size of the node. On the other hand, the increase in node size is not a practical solution because it will need more powerful and expensive computational machines.
Ethereum 2.0 will disperse the network load in 64 chains that will reduce congestion and improve speed. Even though more chains will require less input from validators. They will only need to run shard instead of the entire Ethereum. It makes nodes lightweight that allows Ethereum to scale up and maintain decentralization.
Ethereum 2.0 improves Ethereum security against attacks like 51%. In these types of attacks, someone controls the network majority and force fraudulent changes. The transition to PoS means that now Ethereum protocol has greater resistance against attacks.
It is not possible to achieve such high-level security utilizing PoW because someone can control the majority. After all, all the miners do not have staked their coins.
No doubt that Ethereum and other blockchains are energy-intensive due to mining. But now, Ethereum is moving toward staking to reduce power consumption. Although staking will be introduced, but Ethereum will run parallel for a time before it merges to Ethereum 2.0; one is secured by Staking other by computing power.
People are getting familiar with the blockchain technology and they are looking for more updates that can enhance transaction speed and security. Ethereum 2.0 launch is the most awaited event for all blockchain enthusiasts. It is an update to Ethereum that makes network sustainable and fast without enhancing node size.