What is Ethereum 2.0? Is it different from Ethereum?

By October 23, 2020No Comments
What is Ethereum 2.0? Is it different from Ethereum? | WazirX

What Is Ethereum?

Ethereum is the second-largest cryptocurrency platform by market capitalization, behind Bitcoin.

Ethereum has open access to digital money and data-friendly services for everyone despite your background or location. It’s a community-built technology behind the cryptocurrency Ether (ETH) and thousands of applications you can use today.

Ether is like a vehicle for moving around on the Ethereum platform and is sought by mostly developers looking to develop and run applications inside.

1 ETH Ethereum = 25,712.66 INR at the rate on 06-10-2020.

Who Created Ethereum?

Ethereum Foundation is the governing body responsible for the development of this open-source blockchain platform.

The Ethereum Foundation (EF) is a non-profit organization dedicated to supporting Ethereum and related technologies.

The EF is not a traditional non-profit or a company. This means their role is not to control Ethereum and they are not the only organization that funds the development of Ethereum-related technologies.

How Can You Use Ethereum?

Ethereum is open to everyone. No government or company has control over Ethereum. It is nearly impossible for anyone to stop you from receiving payments or using services on Ethereum. Anyone from any part of the world can write and develop applications on Ethereum involving some digital value – lending, borrowing, investing, trading, etc.

  • Banking

Ethereum gives you easy access to financial services and all you need to access its lending, borrowing, and savings products is an internet connection.

  • Private Internet

Your personal details are not required to use an Ethereum application.

  • Peer-to-peer connections

With Ethereum, you can make agreements and move money directly with someone else without going through intermediary companies.

  • Compatibility And Commerce

Better products and experiences are being built all the time because Ethereum products are compatible by default. Customers have a secure, built-in guarantee that funds will only change hands if you provide what was agreed.

In a way, Ethereum builds on Bitcoin’s innovation, including some big differences. Both let you use digital money without payment providers or banks. However, Ethereum is programmable, so you can also use it for lots of different digital assets.

This means Ethereum is for more than payments. It is a marketplace of financial services, games, and applications that cannot take your data or censor you.

What Is Ethereum 2.0?

Ethereum 2.0 is an upgrade to the Ethereum network, giving it the scalability and security it needs to serve all of humanity. Ethereum 2.0 will be released in multiple “Phases” starting in 2020. Each phase will improve the functionality and performance of Ethereum in different ways.

Transition To Ethereum 2.0

The highly anticipated launch of Ethereum 2.0 is expected to have little to no impact on users and decentralized applications currently operating on Ethereum.

Ethereum 2.0 will reduce energy consumption, allow the network to process more transactions, and increase security. Technically speaking, Ethereum will become a proof-of-stake blockchain and introduce shard chains. This is a huge change to how Ethereum works and it should bring equally huge benefits.

But it’s only a change to Ethereum’s infrastructure. If you’re already an ETH holder, you don’t need to do anything because Ethereum 2.0 will be compatible with the main Ethereum network you use today. You’ll be able to use the ETH you own today in Ethereum 2.0 too.

What is the difference between Ethereum 1.0 and Ethereum 2.0?

From Ethereum 1.0 to Ethereum 2.0, users and developers will begin to see noticeable improvements to transaction efficiency on the merged network immediately.

There are two primary improvements introduced by Ethereum 2.0 that do not exist in Ethereum 1.0: Proof of Stake and Shard Chains.

Proof of Stake: Ethereum 1.0 runs on a consensus mechanism known as Proof of Work (PoW). Proof of Stake (PoS) is an upgrade that enables improved security, scalability, and energy efficiency.

Shard Chains: Shard chains are a scalability mechanism which drastically improves the throughput of the Ethereum blockchain. Shard chains are a mechanism through which the Ethereum blockchain is “split”. This allows for transactions to be processed in parallel rather than consecutively. Each shard chain is like adding another lane to upgrade Ethereum from a single lane road to a multiple lane highway. More lanes lead to much higher throughput.

Ethereum 2.0 will primarily benefit the scalability, throughput, and security of the Ethereum public mainnet. Ethereum 2.0 will not eliminate any of the data history, transaction records, or asset ownership of the Ethereum 1.0 chain.

The Ethereum 2.0 upgrade is the technology and multi-year roadmap intended to transition the world’s second-largest blockchain by market capitalization from PoW to PoS.

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