ETH 2.0: What’s happened so far and when is the next phase?
Upgrades being built by teams “from across the Ethereum ecosystem”
Ethereum 2.0 (ETH 2.0), also known as Serenity – originally planned for a 2019 release – has now been pushed back to June 2022.
ETH 2.0 will see the world’s second largest cryptocurrency move from the energy-hungry Proof-of-Work (PoW) consensus to the leaner, greener Proof of Stake (PoS) mechanism.
The Ethereum organisation says the upgrade will make the crypto “more scalable, more secure, and more sustainable”. The changes are being built by teams “from across the Ethereum ecosystem”.
The three parts to ETH 2.0
Despite each part of ETH 2.0 being worked on in parallel, they have certain dependencies that determine when they can be deployed. The three elements are The Beacon Chain, The merge and Shard chains.
The Beacon Chain, which brings PoS to Ethereum, went live on 1 December 2021. It is not yet incorporated into the mainnet and will run in parallel until the transition, or Merge, takes place. Meanwhile Shard chains will expand Ethereum’s capacity to process transactions and store data.
The move will also expand the network of stakers. Staking is the act of depositing 32 ETH to activate validator software. Validators are responsible for storing data, processing transactions and adding new blocks to the blockchain.
Coinbase, the American cryptocurrency exchange platform, describes staking as “the process of actively participating in transaction validation (similar to mining) on a PoS blockchain”.
The merge is expected by the end of June 2022 and will mark the end of Proof of Work for Ethereum. PoW, which will still be used by the Bitcoin blockchain and some other cryptos, has been criticised for requiring huge amounts of computing power – and thus energy – to mine new coins. The Shard chain is also expected to occur in 2022.
Some crypto experts have predicted ether will one day overtake bitcoin as the number one cryptocurrency – driven partly by its ability to run smart contracts – automated programs that execute actions when certain conditions are met.
Smart contracts are the backbone of decentralised finance (DeFi), which allows people without bank accounts to make cash transactions.
ETH/USD price history
|Jan 17, 2022||3269.60||-80.75||-2.41%||3350.35||3360.06||3252.50|
|Jan 16, 2022||3350.36||22.61||0.68%||3327.75||3396.79||3274.86|
|Jan 15, 2022||3327.73||18.43||0.56%||3309.30||3373.89||3262.00|
|Jan 14, 2022||3309.36||66.51||2.05%||3242.85||3344.62||3189.54|
|Jan 13, 2022||3242.84||-130.24||-3.86%||3373.08||3411.82||3233.22|
|Jan 12, 2022||3373.12||132.72||4.10%||3240.40||3414.40||3205.97|
|Jan 11, 2022||3240.24||157.05||5.09%||3083.19||3266.57||3052.87|
|Jan 10, 2022||3083.21||-68.39||-2.17%||3151.60||3181.73||2928.34|
|Jan 9, 2022||3151.59||71.34||2.32%||3080.25||3212.22||3057.13|
|Jan 8, 2022||3080.26||-117.86||-3.69%||3198.12||3248.91||2999.22|
|Jan 7, 2022||3197.98||-207.00||-6.08%||3404.98||3414.87||3060.58|
|Jan 6, 2022||3404.93||-133.60||-3.78%||3538.53||3550.01||3297.21|
|Jan 5, 2022||3538.66||-246.17||-6.50%||3784.83||3849.10||3411.17|
|Jan 4, 2022||3784.93||18.77||0.50%||3766.16||3894.16||3712.45|
|Jan 3, 2022||3766.17||-63.77||-1.67%||3829.94||3853.00||3681.01|
|Jan 2, 2022||3829.69||63.17||1.68%||3766.52||3858.08||3717.72|
|Jan 1, 2022||3766.51||89.39||2.43%||3677.12||3776.89||3673.56|
|Dec 31, 2021||3677.17||-33.17||-0.89%||3710.34||3816.27||3620.60|
|Dec 30, 2021||3710.35||81.59||2.25%||3628.76||3769.81||3583.88|
|Dec 29, 2021||3629.00||-164.19||-4.33%||3793.19||3828.04||3604.06|
Call to arms
Ethereum is asking its community to help roll out the ETH 2.0 upgrade by helping with testing and earning rewards.
As ETH 2.0 is not a new coin it will not change the ETH people hold. It will most likely affect Ethereum miners more than holders as the shift to PoS will see staking take over from mining to approve transactions on the Ethereum blockchain.
In August, Ethereum rolled out the EIP-1559 London Hard Fork network upgrade. This upgrade was dubbed the Ethereum Improvement Proposal Process, or EIP-1559.
Ethereum has made strong "progress" towards ETH 2.0
Aleksandr Pacha the CEO of CryptoWallet a finance solution which allows users to spend crypto from a debit card told Currency.com that "Ethereum has actually made huge progress towards ETH 2.0, the upgrade that will make Ethereum scalable and environmentally friendly. The major uptick in price we saw this year was largely due to EIP1559, an upgrade that burns more ETH to make it a deflationary asset. The more the network burns, the scarcer it becomes.
"The long-awaited "Merge" where Ethereum changes to Proof of Stake and consumes 99% less electricity is expected to arrive in the middle of next year. Ethereum 2.0 has already experienced many delays, so it's difficult to pinpoint an exact date -- and the developers won't give one! The final phase is also expected in 2022, splitting the network into 64 new blockchains to improve transaction times. It's exciting stuff!"