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Eth 2.0 - Reasons for launch and its impact on Crypto
What was the need for Eth 2.0?
What has improved after the update?
What’s different between Ethereum and Eth 2.0?
Phases of Ethereum 2.0
What is the progress of Eth 2.0 since its launch?
Some additional information on Eth 2.0
The bottom line
Eth 2.0 - Reasons for launch and its impact on Crypto
Eth 2.0 - Reasons for launch and its impact on Crypto
Ethereum has undergone many development stages, improving its scalability, efficiency, and speed with each update. With this update, Eth 2.0 has promised that now the Ethereum network will handle more transactions than its previous versions, target to improve the smart contract stability, and deduction in the charged network fees. This article is about the recently launched update a crypto investor or trader should know about.
What was the need for Eth 2.0?
What was the need for Eth 2.0?
Although it can be said that the update is a little more complex than the previous ones, this update is needed for a long time. The earlier versions had many problems like congestion of the network, poor accessibility, and scalability issues. Therefore, these areas are in much need of improvement. Ethereum has access to all the decentralized applications on its blockchain but to make it accessible to every industry, and area, it was mandatory to increase its scalability and accessibility.
What has improved after the update?
What has improved after the update?
The following are the key features that have been improved on the blockchain network since the update:
Advanced Security
Because the network has shifted from the Proof-of-Work protocol to Proof-of-Stake, it has increased the security level of digital assets. Now the accuracy and efficiency of identifying hackers have increased by 51%.
Saving Energy
Earlier the Ethereum blockchain network required high power to operate correctly. But Eth 2.0 is 99.95% more energy efficient.
Staking Protocol
Proof-of-Work seemed to be costlier, and after the launch of Eth 2.0, it has been replaced by the Proof-of-Stake protocol which has resulted in the decline of the cost.
What’s different between Ethereum and Eth 2.0?
What’s different between Ethereum and Eth 2.0?
This question must be in the mind of every crypto trader, so this section will explain to you some points of differences that you can see between them. But you should know that Eth 2.0 is the more updated version of Ethereum only. It has just launched with some advanced features that Ethereum lacks.
The very first point of difference between them is what protocol are they based on. If we talk about Ethereum then it is based on the PoW protocol, whereas Eth 2.0 is based on the PoS protocol.
In the Ethereum network, miners have to solve complex mathematical equations with the help of computer machines. And the first miner to solve the mathematical algorithms will get rewards for it. Whereas on Eth 2.0, validators are appointed and they work on verifying and approving transactions.
Phases of Ethereum 2.0
Phases of Ethereum 2.0
The phases of Eth 2.0 are divided into 3 parts and each one of them is described below:
Phase 0 - Beacon Chain
The chain was launched in December 2020 that worked on the introduction of PoS protocol in the crypto ecosystem. The objective of this chain is to maintain the coordination between the Ethereum networks. It can be said that Beacon Chain is the backbone of Ethereum 2.0.
Another role of it is to help maintain the appointed validators and keep an eye on their work which resulted in more security.
Phase 1 - The Merge
On 15 September 2022, the most awaited merge took place. In this merge the Beacon Chain from phase 0 was merged officially with the Proof-of-Work mainnet. Thus, the protocol services of it were completely replaced by Proof-of-Stake. After the merger, the energy consumption level decreased drastically. This means that the new Ethereum nodes are energy efficient.
Phase 2 - Sharding
In sharding, the ability to process transactions was increased on the Ethereum blockchain network. The whole Ethereum blockchain has been divided into different shards (to be specific 69). And each shard is responsible for processing a part of every transaction. And here comes the Beacon Chain that works to coordinate each shard and make sure the transaction has been verified and completed. After dividing the network into shards, the processing time has been decreased and the time taken by each transaction on a blockchain is also decreased.
What is the progress of Eth 2.0 since its launch?
What is the progress of Eth 2.0 since its launch?
It will not be wrong to say that the so far progress of the blockchain is not at all disappointing. As per our research since its launch currencies worth 17.3 million have already been staked. And even after the Shanghai update 107k $ETH was being deposited in the contact addresses.
As of now, the total number of validators working is 569,291 and their participation rate is over 99.9%. On average the participation rate should be between 80-90% but here the participation rate is way higher, thus the security of the blockchain is top-notch.
Some additional information on Eth 2.0
Some additional information on Eth 2.0
Ever since the merge, the mining process has been stopped completely and the sharding process took over. And the interaction of the users with the dApps has not been affected by the merge. And users also have some tax implications for making transfers. Users have also confirmed that there has been an increase in the transaction processing time.
The bottom line
The bottom line
In recent years, people only prefer to invest their savings through crypto. Crypto trading has been so in demand that every person is trading actively or has tried to trade at least once. But it does not mean that it will only result in profit. If you will trade without making any prior evaluation, then you may face some loss. Thus it is necessary for you to make some evaluation, take the advice of the professionals and then begin your trading journey.
Existing traders must be familiar with the Ethereum network and its updates. Thus, this article was for those who are keeping a close eye on these types of updates. We hope that our article provided you with enough information about the recent Eth 2.0 launch and its working. And if you still want to research more on it then their website is always available for you to check out.
