Ethereum blockchain aims to fulfill those things which Bitcoin hasn’t been able to, according to Cointelegraph. Due to Bitcoin’s limitations such as insistence of a proof-of-work (PoW) consensus algorithm and lack of scalability, Ethereum is not able to reach its full potential. To solve Ethereum’s scalability problems, Vitalik Buterin and ETH group devised a network upgrade called Ethereum 2.0 to change how Ethereum works but it is expected to take years to come into action.
Based on Cointelegraph’s data, Ethereum 2.0 will mark a shift from the network consensus algorithm. Instead of Ethereum blockchain functioning on an energy intensive proof-of-work algorithm, the Ethereum 2.0 would make the switch to a proof-of-stake (PoS) algorithm. A PoW algorithm can bring benefits over a PoS algorithm in terms of scalability, security and accessibility.
Information from Cointelegraph stated that Phase 0 of Ethereum 2.0 upgrade introduced the Beacon Chain, to enable the shift to PoS and allowing users to stake their Ethereum and become validators. However, Ethereum’s mainnet and beacon chain are expected to be linked, in order to control and coordinate the PoS system. Early validators are expected to be linked to the project’s future prospects. Phase 1 of Ethereum 2.0 is expected to merge the Beacon Chain with the mainnet. From Phase 1 onwards, Ethereum 2.0 will house its entire history of transactions and support smart contracts on the PoS network with stakers and validators also entering the area. With Ethereum 2.0, validators and other users can run their own shards, to validate transactions and keep the mainchain from seeing any sort of problems. Phase 2 will introduce Ethereum Web Assembly (eWASM), which will be a subset of the WebAssembly for the Ethereum smart contract execution layer. User will be able to access this worldwide to run smart contracts and interact with decentralised applications (dApps). However, Phase 2’s implementation has been delayed.
(With insights from Cointelegraph)
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