Ethereum community has reason to breathe a sigh of relief today. The first phase of ETH 2.0 will start on December 1st. Until recently, it was unclear whether this would happen and whether the phase would start without postponement. The point is that at least 524,288 ETH had to be stored in a smart contract. These deposited ETH are staked by investors — this is a kind of innovation (PoS) in contrast to its predecessor (PoW).
The start of Ethereum 2.0 had been announced for a long time. It was often postponed but now is really close to it. Ethereum receives upgrades and, thanks to good news, can also expect a significant price increase.
The launch of ETH 2.0 was considered as a key element by many traders. In order to stay ahead of the competition in the long term, Ethereum should improve scalability and performance. If everything will be implemented as planned, this would be a very positive signal for long-term investors.
What Actually Is ETH 2.0?
Like all blockchain platforms, Ethereum also has to develop further in order to confront the general problems of blockchain technology. How was mentioned before, this is about the scalability and performance of a blockchain. Despite the fact that Ethereum 1.0 can already process more transactions per second than Bitcoin, there should be a further, significant improvement after the upgrade to Ethereum 2.0.
An essential part of this upgrade is a switch from Proof-of-Work (PoW) to Proof-of-Stake (PoS), which is designed to make the network more efficient. In this case, miners are no longer required, ETH is only staked. The more ETH a user stakes, the more voting rights he/she has in the network.
In addition, ETH 2.0 will also implement sharding. This means a splitting of the blockchain network into several parts (shards), each of which acts as an independent ‘mini blockchain’ with its own account balances and smart contracts.
The Impact of ETH 2.0 on the Crypto Ecosystem
Today, everyone agrees that ETH 2.0 is an important step for the entire crypto ecosystem. Ethereum is still the best known and most widely used blockchain platform.
A successful upgrade to Ethereum 2.0 means further growth in the long term. Moreover, previously, a lot of apps were unable to be implemented due to insufficient performance and scalability. These are fundamental issues that all blockchain developers must cope with. Cooperation and joint research of this technology are the main things.
The mood among ETH investors is consistently positive, as the latest price development shows. ETH is the second-largest cryptocurrency by market cap and still has a lot of opportunities for improvement.
Let’s keep our fingers crossed that ETH 2.0 can celebrate a successful start of the first phase! Feel free to share your support in the comments!