Ethereum 2.0 is an upgrade to the already existing Ethereum blockchain. It aims to increase the speed, efficiency, and scalability of the Ethereum network, enabling it to address the bottlenecks and increase the number of transactions. The pseudo names for Ethereum 2.0 are Eth2 or Serenity.
Ethereum 2.0 has some fundamental changes in its structure and design as compared to its previous version. The two major changes are “proof of stake” and “sharding.” Let us look at both these terms to understand the functioning of Ethereum 2.0
What Is Proof of Stake?
In a proof of stake consensus mechanism, there are validators instead of miners. Their major role is to propose new blocks, provide computing power, storage, and the bandwidth to validate transactions. The validators are given periodic payouts in ETH. There is a deposit contract of 32 ETH that should be locked in by these validators. It is a type of a security deposit that gets forfeited fully or partially in an event of any malpractice. This method is very effective in curbing malpractices.
What Is Sharding?
Sharding is the process of splitting one blockchain into multiple blockchains known as shards. It makes the entire network more efficient as a single validator does not have to handle the workload alone. Every validator maintains information related to “their” shard. These validators are also shuffled between shards regularly to avoid any kind of manipulation. The Beacon Chain is used for the communication and coordination of the shards.
How Does Ethereum Work?
The validators are the most important aspect of Ethereum 2.0 as they are solely responsible for its infrastructure and maintenance. Every validator has two keys: a signing key and a withdrawal key. A signing key is used to perform “work for the blockchain.” There are three main functions of a validator:
To propose and add blocks to the Beacon Chain or one of the shard chains.
To attest the validity of the beacon and shard chain.
To report malicious behavior by other validators.
Due to these reasons, the signing key must be online 24/7. The withdrawal key performs actions on the funds. It is not necessary for the withdrawal key to be available all the time. However, it needs to be secured as the person has control over all the funds. If you want to become a validator, you need to lock up 32 ETH in the beacon chain. Validators do not work alone. They mostly work in committees wherein groups of minimum 128 validators vote on the head of the blockchain. The votes cast are of different types. They are:
LMD GHOST votes: Attestations are for the head of the blockchain, specifically for the most recent block that the validators have agreed upon.
Casper FFG votes: Attestations are for the checkpoint in the current epoch.
A checkpoint is the most recent block in the first slot of an epoch. Epochs comprise of 32 slots. Once 2 or 3 validators agree upon the most recent checkpoint, it gets justified. Once the previous checkpoint is justified, the last block gets finalized. So, after two epochs one block is finalized.
What Is the Difference Between Ethereum and Ethereum 2.0?
The major difference between Ethereum 2.0 and its counterpart is the consensus mechanism which they use. Ethereum uses proof of work (PoW) mechanism, while Ethereum 2.0 uses proof of stake (PoS) mechanism.
The proof of work mechanism is an energy-intensive process in which complex mathematical puzzles are decoded by miners with the help of computer hardware processing power. This is also used to verify new transactions. Whoever decodes the puzzle first, adds a new transaction which contains the previous transactional records making up the blockchain.
In the proof of stake mechanism, crypto is used to verify a transaction by the transaction validators instead of miners. The validators must propose a depending on the time and amount of crypto they hold. When a majority of validators claim to have seen the block, it is added to the blockchain and they are rewarded for conducting the block proposition successfully. This is how “forging” or “minting” takes place.
PoS is a more energy efficient mechanism as compared to PoW since it uses less computing power to secure a blockchain.
How Will Ethereum 2.0 Be More Secure?
The most important advantage of Ethereum 2.0 is its scalability. Ethereum 2.0 will have shard chains due to which it can conduct up to 10,000 transactions per second whereas Ethereum can support only 30 transactions per second. This also leads to a lot of delays and network congestion which will not be the case in Ethereum 2.0 [2]. The implementation of shard chains speeds up the network and can scale more easily as the transactions are handled in parallel chains instead of consecutive ones.
The main idea behind devising an upgrade to the existing Ethereum is to exercise more safety in the entire transaction. Many proof of stake networks have a very small set of validators. This accounts for decreased network security. Ethereum 2.0 requires a large set of validators, approximately 16,384, which makes it more decentralized, secure, and less prone to manipulation.
The Future of Ethereum 2.0
Ethereum is the largest general purpose blockchain in today’s market since its launch in 2015. More than 1,400 Ethereum projects are being built [3]. The upgrade will roll out in three phases: phase 0, 1, and 2.
Phase 0 was launched in December 2020 with the implementation of the Beacon Chain. It stores the registry of validators and deploys the proof of work consensus mechanism.
Phase 1 is anticipated to launch in 2021 and the shard chains will be integrated. 64 shards are expected to launch.
The Ethereum 1.0 chain will become a shard of Eth2 in Step 1.5, and transfers will be enabled, resulting in Eth2 resembling a “perpetual debt- and equity-like bond” and a floating rate, as validators can now freely enter and exit the scheme.
In Phase 2, the shards will become fully functional and compatible with smart contracts. It is scheduled to launch in 2021/22. It will be an upgraded version with added features.
With its added advantages and scalability, Ethereum 2.0 will garner more and more interest from investors in the years ahead.
What Are the Risks Associated with Ethereum 2.0 Participation?
As an ETH holder interested in Eth2 by staking, the key risks you face are:
One-way Beacon Chain transfers and locked funds until Phase 1.5 (unknown timeline). The client app bugs (the software one runs as a validator) can be slashed.
Shutdown of the service provider prior to Step 1.5.
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大家会很形象的把公链比作操作系统，DAPP 类比的话就是 APP，那么预言机可以形象的比做 API 接口（API 是一组定义、程序及协议的集合，通过 API 接口实现计算机软件之间的相互通信）。这个类比虽然不准确，而预言机正是扮演这样的角色，预言机是区块链和现实世界之间的纽带，可以实现数据互通的工具。
先说 DeFi 领域的项目为什么需要预言机。类似 DAI 这样的稳定币系统，需要获取 ETH 的实时价格，来判断所抵押的加密货币是否达到了平仓价格进而触发平仓。假设有 1000 个节点，那就需要向交易所（比如币安）或 CoinMarketCap 的 ETH / USDT 交易对进行 1000 次的 API 数据请求 ，但是，由于 ETH 的价格是实时变动的，加上网络延迟、计算速度等原因，每个节点获取到的价格可能都不相同，这部分数据被输入到智能合约后，节点间无法达成共识，那么整个系统就会崩溃。
如果大家很感兴趣，可以看一下我男神 DOS Network 创始人@nrek jonny 关于《智能合约中的随机数》的分享。其实，早在 Fomo3D 这个游戏出来之后，以太坊的 Team Leader 就在推特上说过链上是无法生成随机数的。Dear devs… you can`t generate random numbers on chain！
