ETH 2.0: What’s happened so far and when is the next phase?

Upgrades are being built by teams “from across the Ethereum ecosystem”

The launch date for ETH 2.0, which was originally planned for 2019, could be set for August 2022, according to Ethereum co-founder Vitalik Buterin, who was speaking at the recent ETH Shanghai Web 3.0 Developer Summit.

ETH 2.0, now known as the ‘consensus layer’, will see the world’s second-largest cryptocurrency move from the energy-hungry proof-of-work (PoW) consensus mechanism to the leaner, greener proof-of-stake (PoS) system.

The Ethereum organisation says the upgrade will make the crypto “more scalable, more secure, and more sustainable,” and that the changes are being implemented 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 the ETH 2.0 release date. 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 The Merge, takes place in the second quarter of 2022. Meanwhile, Shard chains will expand Ethereum’s capacity to process transactions and store data. Shard chains should ship sometime in 2023.

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.

Smart contracts

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 August 2022 and will mark the end of PoW 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. 

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Some crypto experts have predicted that ether (ETH) will one day overtake bitcoin (BTC) 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 carry out transactions.

ETH/USD price history

Date Close Change Change(%) Open High Low
Jun 28, 2022 1181.33 -9.75 -0.82% 1191.08 1198.57 1160.93
Jun 27, 2022 1191.18 -5.41 -0.45% 1196.59 1237.75 1173.26
Jun 26, 2022 1196.63 -44.33 -3.57% 1240.96 1279.94 1193.88
Jun 25, 2022 1240.66 16.57 1.35% 1224.09 1255.06 1178.86
Jun 24, 2022 1224.06 80.14 7.01% 1143.92 1244.89 1130.74
Jun 23, 2022 1143.90 94.89 9.05% 1049.01 1153.40 1043.39
Jun 22, 2022 1049.00 -75.72 -6.73% 1124.72 1126.15 1042.39
Jun 21, 2022 1124.73 -2.21 -0.20% 1126.94 1192.42 1108.06
Jun 20, 2022 1127.01 0.06 0.01% 1126.95 1168.24 1050.68
Jun 19, 2022 1127.07 133.77 13.47% 993.30 1148.86 935.04
Jun 18, 2022 993.35 -91.96 -8.47% 1085.31 1096.58 880.36
Jun 17, 2022 1085.30 18.29 1.71% 1067.01 1116.35 1049.20
Jun 16, 2022 1066.98 -169.35 -13.70% 1236.33 1257.03 1050.39
Jun 15, 2022 1236.26 29.27 2.43% 1206.99 1247.21 1011.20
Jun 14, 2022 1206.96 -0.56 -0.05% 1207.52 1265.51 1074.73
Jun 13, 2022 1207.50 -225.20 -15.72% 1432.70 1452.97 1162.86
Jun 12, 2022 1433.53 -97.54 -6.37% 1531.07 1544.94 1423.51
Jun 11, 2022 1531.14 -129.99 -7.83% 1661.13 1680.43 1498.51
Jun 10, 2022 1661.03 -126.07 -7.05% 1787.10 1803.22 1653.33
Jun 9, 2022 1787.25 -3.20 -0.18% 1790.45 1831.81 1775.53

Call to arms

Ethereum is asking its community to help roll out the consensus layer 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 ether miners more than holders, as the shift to PoS will see staking take over from mining as the means by which transactions on the Ethereum blockchain are approved.

In August, Ethereum rolled out the EIP-1559 London Hard Fork network upgrade, or the Ethereum Improvement Proposal Process.

Ethereum has made strong “progress” towards ETH 2.0

Aleksandr Pacha, the CEO of CryptoWallet – a finance solution that allows users to spend crypto using a debit card – told Currency.com last year 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 EIP-1559, 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!”

FAQs

Ethereum 2.0’s first phase began on 1 December 2020. There are still two phases to go, and the full release is expected later this year.

According to analysts at TradingBeasts, ETH could be worth $2,468.60 by the end of 2022. 

Ethereum to US Dollar
Daily change
1175.01
Low: 1169.95
High: 1227.9

Further reading

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