What is Ethereum 2.0? 5 Things You Need To Know About Ethereum 2.0

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Ethereum is the most common decentralized launch pad by far. Ethereum provides you with tools to mint your cryptocurrency, a language, and a programming framework.

Ethereum is powered by Ether, the second-largest cryptocurrency. The Ethereum project is strongly supported by the group and actively established through our discussions.

Why Ethereum 2.0?

Performance

Ethereum can process approximately 25 transactions per second, which are not viable if it is mainstream. Visa will execute 24,000 transactions per second to put it into perspective, even if demand is only around 4,000 tps at peak times.

More environmentally-friendly approach

Ethereum is moving from Proof of Work to Proof of Stake. At PoW, it is very difficult and expensive to get the right answer and you are rewarded with it.

In PoS, it is very straightforward to get the correct answer, but getting the wrong answer is very expensive because you are fined for it.

PoW is the right thing to do, PoS punishes you for doing the wrong thing.

PoW has a lot of power consumption, which is the least environmentally friendly alternative. For example, Bitcoin’s energy consumption is comparable to New Zealand.

https://i.imgur.com/fHUU3TN.png

Better secure

Ethereum will become more stable by switching from PoW to PoS by resolving the 51 percent attack issue

Why pure PoW is more decentralized than pure PoS?

In a PoW system, chain protection is closely linked to limited resources in the external physical world which have nothing to do with the virtual man-made blockchain.

By practice, this ensures that the protection of the chain is spread among a large number of unrelated individuals and that none of them alone has absolute power over the network specification itself.

We saw how those group dynamics took place during the Bitcoin civil war, and we saw who those groups were:

  1. There were the core developers who managed the code for the protocol.
  2. There was what was known as the’ economic plurality ‘ serving companies and rich people who owned huge stakes.
  3. Miners dominated the selection process for the transaction (consensus).
  4. And there was the broader user community, especially non-mining full-node operators (“validators”).

Because the mining is “virtual,” groups 2 and 3 above in the same group collapse. Worse still, because the leaders of blockchains appear to have the largest number of stakes and because of the Pareto principle, there is also a chance of group 1 collapsing into the same regulated cartel. There is, therefore, a growing danger that we will leave a situation in which power is distributed between 4 groups into 2 groups.

Moreover, unlike PoW, a controlling group with “no-cost censorship” or a “Buyout attack” may emerge in PoS. In other words, if enough stake is purchased and staked, a single entity will be able to indefinitely regulate transactions allowing new individuals to join the consensual community, and this costs $0 once there is enough stake. This does not refer to PoW.

That’s why pure PoW is decentralized rather than pure PoS.

Question of morality

As far as I am aware, the consumption of energy is not inherently immoral. How energy is generated and consumed should ethical concerns be answered.

People and businesses continually consume energy. The Internet absorbs a massive amount of energy, perhaps many orders larger than Bitcoin. The same applies to various countries such as Russia, China, India, the United States, and many others. However, we never saw articles saying that we have to get rid of these beings / because they absorb electricity/.

Consumption of energy is a fact of life. The only ethical question is how we get and use this energy, and that is a problem that is unrelated to Bitcoin or PoW. Those who say that they do spread simple anti-Bitcoin propaganda.

The same is true for factories. It is surely true that factories can pollute the environment, but this (1) does not need to be the case because goods can be eco-friendly and (2) if this is a problem, then before we complain about the PoW on our factories ‘ manual laptop (or factory-produced telephone) over our cloud and factory-powered Facebook, we might want to check our connection.

What is Proof-of-Work?

Proof of work exists by miners who try to solve extremely difficult mathematical problems. Finding a solution is a random guessing game, but it is easy to find out if a solution is the right one because there can be only one solution.

Miners are not in a position to cheat the system because these solutions require real-world capital.

PoW is vulnerable to the 51% attack

One of the biggest downsides of PoW is that it is fairly vulnerable to an attack of 51 percent.

A 51% attack is when a miner controls 51% of the network’s computational power, or, more likely, a mining pool.

With this feature, fraudulent transactions and double-spending funds can be invalidated. Bitcoin became renowned for its ability to solve the double problem.

What is Proof-of-Stake?

PoS happens when a miner positions a stake or locks up a number of its coins for a block of transactions.

In PoS, cryptographic calculations are much simpler for computers to resolve; only a certain percentage of all coins available in a given currency has to be proven.

For example, if you own 1% of all Ether (ETH), you could mine 1% of all Ethereum transactions.

Switching from PoW to PoS

Ethereum plans to switch a hard fork from PoW to a PoS system shortly, most likely using a protocol called Casper.

Ethereum Casper Protocol

The Casper protocol was designed to help Ethereum transition from a POW model to a Proof-of-Stake (PoS) model while reducing the risks associated with such a development.

https://i.imgur.com/aGKPDIq.jpg

Casper will be applied in stages to reduce the network’s risks.

The first stage will be Casper FFG, a mix of PoW and PoS (The Friendly Finality Gadget). In this case, PoW is still the network’s main algorithm, but PoS validates every fiftieth node.

https://i.imgur.com/2ZIxRuj.png

If you’re interested in learning how Casper operates under the hood, Vitalik himself has written about this.

Nevertheless, it is important to remember that early versions of PoS are not decentralized. Just a few users are allowed to participate when Ethereum checks to stake mechanisms.

For a while, PoW will coexist with PoS. Two different chains.

1. Transfer ETH from the blockchain Ethereum 2.0 into the old blockchain Ethereum will again in the short term

The latest Ethereum 2.0 architecture would possibly take years to complete the integration of the old ethereum PoW chain into the new PoS network (see below).

In the meantime, ETH transfers will be disabled between the two chains.

Since, according to Ethereum 2.0 developer Preston Van Loon, the added complexity of building a two-way bridge poses a security risk for the two chains.

“We could see a scenario that would mess one blockchain up by another and we had to go through a hard box to recover the money, or there was a flaw in printing money,” said Van Loon, the Prysmatic Labs team leader.

Transfers require a secure method to ensure that the PoW network of Etherum is compatible with the truthfulness of statements on the PoS network.

“The assumption that it is going to have a limited number of[ transaction validators also referred to as’ stakers’] in the first few months of the Ethereum 2.0 chain and that it will potentially have less safety than the current Ethereum 1.0.0 chain,” said Ben Edgington.

“This theoretically provides a vector of attack. If someone is willing to make free cash on the 1.0 chain of Ethereum, they might try to attack the Ethereum 2.0 chain to convince Ethereum 1.0 chain of their[ fake] funds, “Edgington said.

Buterin discusses two potential ways to build a “bridge” between the two blockchains in a recent blog post. To reduce these threats, Buterin proposes that “human intervention” will reverse transfers from the Ethereum 1.0 network, both of which require emergency solutions on the Ethereum 1.0 side.

Such plans are just suggestions. Other researchers from Ethereum 2.0 such as Danny Ryan have proposed similar solutions to create a secure link between the two networks.

For now, the community has not added a link to the Ethereum 2.0 roadmap.


2. Ethereum 2.0 will act as a separate blockchain for years before the two are fully combined.

The beacon chain is the foundation of the modern PoS network. This blockchain will serve as a central command center for receiving data from all other mini blockchains (also known as shards) in Ethereum 2.0 network on verified transactions.

In Phase One, shards are started to link to the current beacon chain. In stage two, developers must introduce execution environments on each shard for various kinds of decentralized applications (dapps).

The complete architecture of Ethereum 2.0 will then be designed to fully integrate the existing Ethereum Mainnet into the new network.

Edgington estimates that it might take three to four years to complete phase two.

“Ethereum 1.0 and Ethereum 2.0 can go side by side and continue as long as we want. it’s not time-critical. “The protection of assets in the current ethereum mainnet chain is crucial.

Researcher Mihailo Bjelic from Blockchain says a complex system, such as Ethereum 2.0, should not replace the current ethereum mainnet until developers are certain of its trustworthiness.

“Ethereum 2.0 is never better to launch if it’s not safe,” he said. “The responsible choice, if you can not ensure the safety of the system, is just that of scraping it,” Buterin says in a second blog post that he expects a smooth transition, if and when it happens.

“If you are an application developer or a customer, there are currently quite a few changes and disturbances you are experiencing. There will be no improvement in existing applications, “Buterin wrote.

3. Recalling the ethereum blockchain data will be more costly than before.

Dapp developers will face increased transaction costs by recalling and accessing the data from the new Etherum Network. Yet Buterin guides reducing these changes in pain.

“If you’re a developer the largest part of the gas cost change disruption can be avoided by proactively ensuring you don’t create high-size applications. In the same transaction calculate the total storage slots + contracts + contract code accessed to make sure it’s not too big, “wrote Buterin.

The rises in costs arising from changes in the state of ethereum–that is, complete transaction and account accounts on the blockchain–that is protected in a PoS network.

“The way the state is stored in Ethereum 2.0 is changing absolutely. “The state is on my hard disk today[ on ethereum], or on the hard drive of the node that I am referring to,” Edgington said, adding, “Everything is stateless at Ethereum 2.0. I can store the bits of state that I am interested in or there are suppliers like Infura that are skilled in the state provision. The idea is to create a market where people store the data on behalf of others.

4. Ethereum is losing the ability to carry out atomic transactions.

To dapp developers, perhaps most importantly: the next big version of the network brings about the ability to transact ethereum atomically, that is, at once.

Developers will no longer be able to execute transactions between different applications so that the whole series can be recovered automatically if one transaction fails. Only today is this possible on Ethereum because all dapps operate on a similar blockchain network.

The transaction load will be divided into different shards by Ethereum 2.0. Theoretically, new ethereal transactions are also distributed and stored on various shard networks. This introduces a new transaction feature on the ethereum blockchain that makes it impossible for one shard network to instantly know the entire state of a specific shard network.

“If I execute a Shard One transaction and then I want to deal with Shard Two, it takes a whole block for Shard Two to know what happened on Shard One,” said Edgington.

According to Edgington, it adds “a layer of complexity” to dapp programming which is not completely unknown in the mainstream world of computer science.

“The databases always do this. There are locking mechanisms so that I can momentarily lock the resources I’m interested in, and unlock them later when I’m sure all has happened, “Edgington said.

Mihailo Bjelic said this is the industry standard in computer systems and networks. This “asynchronous communication”

“It’s easier to reason and imagine potential code attack vectors or flaws,” Bjelic said. “Every time you introduce a new development paradigm, you have this thing called a curve for learning and developers don’t like it,” says dapp. Indeed some in the Ethereum Community worry about the negative effect this change would have on dapp composability or, as Buterin describes in his post, “the ability of different applications to communicate easily with everyone

“Large dapps requiring multiple shard capacity will become harder to manage,” said Dieter Shirley, CTO of blockchain Dapper Labs.

“No problem transferring tokens between pieces. But it’s much more than a few tokens when we look at something like CryptoKitties, “he said.

“Sharding doesn’t avoid something. It just makes it difficult enough to keep those things from happening.

5. Ethereum 2.0 will only have roughly half the transaction potential as originally scheduled for launch.

Buterin’s fifth post on Ethereum 2.0 shows that the total number of shards is greatly reduced at launch.

Initially, the new network was supposed to have an estimated 1,024 shards, but recently Buterin suggested only 64 shards. The main advantage is that the contact between the shards in Ethereum 2.0 is quicker and simpler.

“This offers sufficient functionality to allow users to keep coins on shards, send transaction fees using these coins and move those coins between shards as simply as they move them inside a shard,” Buterin wrote.

It, according to Edgington, would reduce the burden of cross-share contact for dapp developers.

‘ If Shard One wanted to know the status of Shard Two in the previous Ethereum 2.0 design it had to wait like 64 slots, which are about six and a half minutes. Under this new design, shards will realize the other shadow status within six seconds, “said Edgington.

According to Bjelic, this will also reduce the number of complications in the entire Ethereum 2.0 network.

“You take such an operational risk[ lunch 1,024 shards] that have not yet been tested,” said Bjelic. “There are fewer cross-shard messages to pass across the network[ with 64], but the total bandwidth of the Ethereum 2.0 network will be significantly reduced at its launch.

“We are targeting approximately half of the former design transaction performance,” Edgington said.

However, Van Loon says that the advantage of higher cross-shard communication speeds is worth it: “We don’t need 1,024 times Ethereum’s potential at this time. 64 times would be a huge increase and I think the exchange is worth it if we could make faster cross-linkage between the shards. We will later increase this amount as time goes by.

Ethereum 2.0 is a work-in-progress

Everything said, Ethereum 2.0 is still work-in-progress and buterin’s word isn’t law

“It doesn’t mean something is set in stone just because of Vitalik posts. The whole reason for this is to encourage discussion with the group, “said Zak Cole, founder and chief executive officer of the blockchain start-up Whiteblock. His company supports the development of ethereum 2.0 protocols. “It helps to inform everyone and to understand precisely what’s going on.” Cole expressed reservations about Buterin’s latest ideas, including the idea of creating an intermediate two-way bridge between the Ethereum PoW and the PoS chains.

“It looks pretty risky to me,” said Cole. “The ETH 1.0 chain would need more adjustments. I think we should not mess with the ETH 1.0 chain. “Bjelic is not concerned with discrepancies between researchers and the gradual shifts in direction. Eternal evolution is the eternal condition of any complex software.

“There is no final software update. You’re still going to improve, “he said.

Still, Cole said that it is important to have a rough understanding of “what the future will look like.”

“Without a blueprint, you don’t start building a skyscraper. The first floor will not begin to be designed until you know what the top floor will look like, “he said.

Van Loon said the successful creation of public blockchain requires good communication between researchers and dapp developers.

“We need to begin to put these ideas into writing more often and more consistently,” he says, adding, “Uncertainty raises fear.”

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