Why is everyone hyped for Eth2("Serenity")?

Well, the hype is real, the long-planned upgrade from Ethereum1.0 to ETH2.0 is now set to go live in phases, which will aim to solve problems with network's scalability and security. The first phase will bring in the change in consensus mechanism from Proof of Work to Proof of Stake.

What are you going to learn after reading this article?

You will learn about what is ethereum, ETH2, PoS, PoW and finally when is Eth2.0 live.

⦾ For people who are new to Blockchain, let's first understand what is ethereum?

Ethereum: is a decentralized open-source blockchain featuring smart contract functionality. Ether (ETH) is the native cryptocurrency token of the Ethereum platform. It is the second-largest cryptocurrency by market capitalization, behind Bitcoin. Ethereum is the most actively used blockchain in the world.

On Ethereum, you can write code that controls digital value, runs exactly as programmed, and is accessible anywhere in the world.

⦾ What is the consensus protocol in ethereum?

Consensus protocol: in short helps us to take decisions in ethereum to reach an agreement that benefits the entire group as a whole while continuing transparency in the network.

As we know blockchain is a decentralized peer-to-peer system with no central authority decisions in blockchain are made by its group members.

Now that we know what is consensus lets look at 2 consensus protocols:

Proof of Work (used in Etereum 1.0)

Proof of Stake (will be used in Eth2)

⦾ Proof of Work Implemented in Ethereum 1.0:

In the proof of work consensus, miner nodes have to solve a highly I/O intensive problem to compute the hash for the current block. This is done with the help of DAG (Directed Acyclic Graph) - a very big file which is passed along with the block as an input to the hashing algorithm - Ethash.

⦾ Who is a Miner?

To validate transactions we need to solve highly I/O intensive problems, regular people cannot solve these problems. Miners are organizations or group of people who invest in high-end machines which are capable of high I/O. The first miner to solve the problem adds a new transaction to the record of all transactions that make up the blockchain. They are then rewarded with ethers. This process is called mining.

⦾ Proof of Stake implemented in Eth2.0:

Instead of miners, transactions are validated by staking ethers. People who stake ethers are called validators. Validators are selected to propose a block based on how much ether they hold and how long they have held it for.

Other validators can attest that they have seen a block. When there are enough attestations a block can be added to the blockchain. Validators are then rewarded for the successful block proposition, this process is called forging or minting.

⦾ Why Proof of Stake is better than Proof of work?

It is more energy-efficient, we don't need machines which are capable of high I/O.

This also means that we don't need a lot of computing to reach consensus using POS.

What are the improvements in Eth2?

⦾ The use of PoS instead of PoW makes Eth2 more energy-efficient.

⦾ While Ethereum 1.0 was able to perform around 30 transactions per second, Ethereum 2.0 promises 100,000 transactions per second.

⦾ Introduction to sharding, to increase the efficiency of its resource usage, The new system will accomplish this by breaking data verification tasks up among sets of nodes and each will be responsible for verifying just the data it’s received. That allows the whole blockchain to make use of parallel processing.

⦾ eWASM to replace EVM: eWASM will make it possible to execute Ethereum app code right in today’s web browsers, which is a massive improvement over the EVM.

Eth2 will go live in Phases, Phase 0 is set to go live in December 2020.

⦾ Phase 0 sees the implementation of the Beacon chain launch, which runs a simplified proof of stake blockchain in parallel with the existing system. This is to facilitate the transition between the two types of validation concepts.

⦾ Phase1 will int Sharding to enable parallel processing

⦾ Phase 2 will make use of eWASM to replace EVM.