Is the move to Ethereum 2.0 a watershed moment for crypto?
- Ethereum 2.0 involves a set of upgrades that will move Ethereum from a Proof-of-Work to a Proof-of-Stake consensus mechanism.
- The transition is being touted as a game-changer not just for Ethereum, but for blockchain itself.
Ethereum 2.0, Eth2, or simply ‘Serenity’, refers to a series of upgrades to the current Ethereum network in order to make it more scalable, secure, and sustainable. These upgrades represent a major transition for the Ethereum network, and by extension, the entire Blockchain ecosystem.
Once implemented, Eth2 will boost network speeds from the current average of around 15 transactions per second to potentially 100,000 TPS, according to Ethereum’s founder, Vitalik Buterin. The upgrades will also improve network security and drastically reduce Ethereum’s carbon footprint.
Over the course of these upgrades, Ethereum will change its consensus mechanism from Proof-of-Work to Proof-of-Stake. PoW validates each transaction on the network by making a large number of computer nodes compete against each other to solve complex mathematical problems, which makes it expensive, energy-intensive, and time-consuming. In contrast, PoS uses an algorithm to validate blocks of transactions, which allows it to process them much more quickly and efficiently, at a fraction of the cost.
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