Wednesday, September 22, 2021
HomeNewsEIP-1559 was just the beginning! These upgrades are yet to come

EIP-1559 was just the beginning! These upgrades are yet to come

Ethereum is getting a number of other upgrades after EIP-1559. What are they and what do they do? An analysis.

Buy ETH at eToro now

Ethereum’s path to ETH 2.0

Ethereum’s EIP-1559 upgrade has just caused quite a stir in the crypto industry – and helped push the price of cryptocurrency number 2 up to $ 3,200. However, EIP-1559 just one step out of many: Ethereum will integrate numerous other updates on its way to ETH 2.0. They are supposed to improve ETH in various ways and could also have a positive effect on the course. But which ones are they – and how does Ethereum benefit from them?

Next: In order to understand the upcoming Ethereum upgrades, a little explanation about the next version of Ethereum – ETH 2.0., Called “Serenity. When we talk about “ETH 2.0”, it refers to the upcoming infrastructure upgrade from Ethereum. Its goal: create a more secure, user-friendly, and scalable blockchain. In this way, Ethereum should be able to absorb the necessary growth to realize its original vision. It says: to become a global supercomputer.

The Beacon Chain

An important component on the way there is the so-called beacon chain. This is an improved version of Ethereum that will replace the current ETH blockchain. Your purpose: introduce a new consensus model. So far, like Bitcoin, Ethereum has used a proof-of-work consensus model (PoW). The so-called proof-of-stake consensus mechanism was introduced with the beacon chain. In addition, the beacon chain should coordinate the expanded network of shards and stakers.

Expressed in a simple way: The Beacon Chain is a kind of transition version from the “old” Ethereum to the new Ethereum 2.0. According to the developers, the role of the beacon chain will change over time. However, it is considered a fundamental component for the secure, sustainable and scalable Ethereum, which is to become the number 2 cryptocurrency. Plus, the Eth2 upgrades are all linked in some way. The beacon chain also influences the other upgrades.

Prepare for shard introduction

After the mainnet has merged with the beacon chain, the next upgrade will introduce the “shard chains” into the proof-of-stake network. These shards are designed to increase the capacity of the network and improve the speed of transactions. To achieve this, the network will be expanded to 64 blockchains. The beacon chain, including the proof-of-stake mechanism, is an important first step in introducing the shards. Because: These require staking in order to function safely. The developers about staking in ETH 2.0:

“This is a new way for you to contribute to the security of Ethereum. Think of it as a public good that makes Ethereum healthier and earns you more ETH in the process. In practice, it means that you are doing ETH staking in order to activate a validator software. As a validator, you will process transactions and create new blocks in the chain. “

Analyst Pastry.eth explains another function of the Beacon Chain:

“In ETH 2.0, validator nodes will take on the role of miners who previously processed [Transaktionen] and have taken over the creation of new blocks.

To achieve this, the beacon chain was set up, which requires at least 16,384 active validators, which will eventually replace the miners in securing the network. “

Come in addition: The Beacon Chain already has more than 200,000 active validators, at the same time 6.6 million ETH are reserved for staking, as the analyst explains:

The Merge

Ultimately, the current Ethereum mainnet will “merge” with the proof-of-stake system of the beacon chain. From this point on, Ethereum no longer uses proof-of-work and is a single proof-of-stake blockchain. The entire transaction history and the current state of the ETH network will be taken over completely. In the past, the process was still referred to as “docking”, today the developers use the lively expression “the merge”. The chains are to be merged before the introduction of the above-mentioned shard chains.

With the switch from PoW to PoS, Ethereum will also become a “greener” cryptocurrency, since a computationally intensive (and thus energy-hungry) proof-of-work mechanism is no longer necessary for the creation of new coins. For the analyst Pastry.eth this is the “beginning of a more sustainable, environmentally friendly Ethereum”:

“This will mark the end of PoW on ETH and the beginning of a more sustainable, environmentally friendly Ethereum.

Miners invest their resources, mainly electricity, in PoW [Transaktionen] validate and secure the network.

PoS addresses PoW’s environmental concerns by eliminating miners entirely. “

Other advantages of proof-of-stake

Apart from that, the developers are hoping for advantages from Ethereum’s switch to PoS. In addition to shorter transaction times and lower fees, this also includes improved security, more democratic administration and a significantly more efficient use of resources.

The team behind Ethereum explains it well:

“Imagine Ethereum was a spaceship that is not quite ready for an interstellar journey. With the Beacon Chain, the community built a new engine and hardened hull. When the time is right, the current ship will dock with this new system and merge into a ship ready to travel a few light years and conquer the universe. “

We come to the last important update in this series: the Shard Chains.

The shard chains

The multi-stage shard chain upgrade is planned after the merging of the mainnet with the beacon chain. It’s supposed to improve Ethereum’s scalability and capacity. This should be achieved through so-called shard chains. They distribute the network load over 64 new chains. At the same time, reduced hardware requirements make it easier to operate a node.

Then: In its current model, Ethereum consists of a global network of nodes, each of which stores the complete history of the ETH blockchain. But that’s a lot of data: An ETH node takes up at least (!) 5 terabytes of storage space. Most average computers have far fewer. With sharding in ETH 2.0, however, validators only have to save and execute the data for the shard to be checked – not for the entire network.

Pastry.eth on the benefits of sharding:

“Sharding could enable thousands of transfers per second and significantly reduce the hardware requirements for running a node.”

Final date: “sometime 2022”

Ethereum co-founder Vitalik Buterin explains which considerations flowed into the design of the shard chains in this “Bankless” podcast:

According to the developers, Ethereum’s Shard Chains will be launched “sometime in 2022” – depending on how quickly development progresses after “The Merge”. After that, expect Ethereum further upgrades – such as the so-called ZK rollups.

According to Pastry.eth, ZK rollups are essential for Ethereum to be able to scale. But what is it all about? Expressed in a simple way: ZK rollups enable transactions to be carried out outside the Ethereum mainchain. This relieves the blockchain and significantly reduces the computing and storage resources required for validating blocks.

That’s why Pastry.Eth is moving in bullish conclusion regarding the upcoming ETH upgrades. He writes:

“There is no doubt that Ethereum is a revolutionary technology. The brightest minds around the world work around the clock to shape the future of ETH.

With PoS, sharding, ZK rollups and many other solutions that were not mentioned, ETH will scale at an unprecedented level. “

Buy ETH at eToro now

Last updated on August 12, 2021

Top broker for buying and trading cryptocurrencies

  • Buy real Bitcoin or Bitcoin CFDs
  • Wallet and exchange in one
  • 14+ cryptos
  • Excellent trading tools
  • Large knowledge and training database
  • Very good spreads

5/ 5

76.8% d. CFD accounts lose money.

Cryptocurrencies are a very volatile, unregulated investment product. Your capital is at risk.

Hasan Sheikh
Hasan, who loves technology and games, is studying Computer Engineering at Delhi JNU. He has been writing technology news since 2016.


Please enter your comment!
Please enter your name here

Trending News

Recent Comments