You might have already heard that Ethereum 2.0’s deposit contract’s Phase 0 was launched on December 2, 2020, at 15:00 UTC. According to the developer Afri Schoedon, the second version of Ethereum costs $40 billion by market capitalization and the deposit contract is acting as a bridge between the proof-of-work (PoW) and proof-of-stake (PoS) systems. Shortly after the release of ETH 2.0, the founder announced an updated roadmap of the digital currency. The new update is not going to be hugely different from the previous version, but still, it has made some improvements in certain fields. We will talk about the new version of ETH in this article, along with some other important information that you should know about the Ethereum 2.0 full launch.
Ethereum 2.0 Genesis Day
The Ethereum 2.0 version was under development in 2015, the genesis of the PoW network. The final launch of the 2.0 version increased the market capital of its native digital currency, Ether (ETH). As an Ethereum staker, you will be able to deposit 32 Ether (ETH) on Ethereum 2.0. However, 16,384 validators have to deposit at least 524,288 ETH in the deposit contract, which is named Beacon chain.
The Beacon Chain is the backbone of Ethereum 2.0’s multiple blockchain designs. The “genesis” event of Ethereum 2.0 was called on December 1, 2020, for the phase 2 operation of the complement of ETH blockchain. The event was held to announce the replacement of the Ethereum WebAssembly (eWASM) with the current Ethereum Virtual Machine (EVM).
When the genesis event is completed, the stakes will be earning their inflation rewards, but for that, they have to deposit ETH as collateral on ETH 2.0. The deposit contract to ETH 2.0 is a single-sided offer, and there are also some software risks. However, the rewards you are getting are 8%–15% annually more than any other investment in any blockchain network.
Since the Beacon Chain is now a completely new thing in the digital finance world, it has a slow processing speed. However, it has been working with PayPal and Visa to make the payment process faster and more efficient. ETH 2.0 is currently working to break the PoS Ethereum blockchain into multiple databases as well as finding a seamless solution for decentralized applications (dapps). As per ConsenSys, the participants in ETH 2.0 are now able to stock and maintain the registry of validators. However, participants can’t proceed with account payments or transactions and payment of electric bills with ETH 2.0 until 2022. All the investors and validators will have to wait for 2022 for Ethereum to release its phase 2 of version 2.0. Until then, you can enjoy the first release of the Beacon Chain.
The Second Coming of Ethereum 2.0
Having a genesis date of the ETH 2.0 was the first step towards finding flow in the new blockchain network’s primary implementations. The launch of the Ethereum Blockchain 2.0 was complicated in the beginning, and that’s why the founders of the cryptocurrency have announced that they won’t be working on a new project until the V 2.0 is fully completed. The finishing date of ETH 2.0 is not yet confirmed, but you can expect it around 2022 or at the beginning of 2023. Since you can only stake 32 Ether to the ETH 2.0 version right now, you are staking around $14,800 as per the current market value. Though the market capital is not that high at the moment, it is enough. And with improvements and qualities that are coming with the next phase of the ETH 2.0 (which are not confirmed yet) of the blockchain network, the quality of stakes is hopefully going to be reasonable. Until then, all we can do is wait but rest be assured that the market price of Ether will go up.
What was it Like Before ETH 2.0 and How is it Now?
ETH was created by the same founder of the Bitcoin magazine, Russo-Canadian developer Vitalik Buterin. He has worked with multiple cryptocurrency projects, such as Mastercoin. Bitcoin operates in the PoW blockchain system, which is less secure and efficient than the PoS consensus mechanism employed by the Ethereum blockchain. Many developers voted PoS over PoW and that led to ETH 2.0’s central specification.
The new version of Ethereum was built in multiple security codings to make sure that the platform is fully secure. The developers have been preparing Ethereum 2.0 for the past few years. And, of course, we expect it to be faster and more reliable than its previous version. Earlier we were talking about the PoS consensus algorithm in the ETH 2.0 version. The speed and developed security of the Ethereum 2.0 will be efficient for the PoS consensus algorithm to be an effective solution in the future for the Proof of Stakes algorithm in the blockchain system. However, the Beacon Chain is not a permanent solution. It came out in phase 0 to let the developers test the innovations of the ETH 2.0 implementations. If the Beacon chain is successful, it will be a part of the Ethereum 2.0 network permanently.
That is why all the skaters and developers are waiting and working for the second upgrade of the blockchain network to make the beacon chain successful. The blockchain will get rid of the proof-of-work system to avail the full benefits of skating. In the meantime, Beacon Chain is serving as a new engine of the future Ethereum network, which we suppose, is going to be a masterpiece. However, with the latest version, ETH still depends on miners and the mining devices’ computing power. But Beacon Chain runs on the Casper POS system for shard chains and its own network. It will help in managing the validators, selecting a block proposer for the shard chains as well as organizing the validators’ communities.
The communities arrange voting systems for managing and implementing consensus rules of the blockchain. The new PoS mechanism is live on the Beacon chain network already, and it requires votes from the validators and delegators for creating new blocks. Anyone can be a validator in the network with 32 ETH in their account, which they cannot use as they are staked for transfer and exchange until the network comes with new characteristics.
Speaking of which, the reward you will receive after creating new blocks will also be locked until the new release of the ETH 2.0 Phase 2. Although you cannot withdraw the stakes from your account until at least 2022, when you finally do, you will surely receive some generous rewards.
About the Beacon Chain Network
The implementation of shards in the Beacon chain network will be able to provide services to millions of users worldwide. The shards will be around 65 in total, and the Beacon chain will be their control blockchain. However, whatever happens in the Beacon chain network depends on the new release. The creation of the Beacon chain represents a typical step toward the future of the blockchain system. The future is to ensure the generalized, Turing-complete blockchain that the co-founder of Ethereum prompted seven years ago. The future vision has been rolled out in several stages that allowed developers to release a four-part release of ETH 2.0. The releases include Frontier, Metropolis, Homestead, and Serenity. With every successful phase, developers will add new features to the current mainchain as well as to the future PoS blockchain. They will add the new features through hard forks or backward-incompatible code alterations.
Hard forks have been used for a while in the blockchain to design a bridge between two types of blockchains. In 2020, hard forks created a bridge between the Eth1.x blockchain and equihash-based blockchains such as Zcash. Serenity is another approved name for ETH 2.0, which is a contentious and ambitious part of the four hard forks. Serenity has multiple benefits that it works with such as scalability and abstraction. Phase 0 is the Beacon chain, phase 1 is the sharding, phase 1.5 is the scaling improvements, and finally, phase 2 that we have been talking about since the beginning of the post, which is only going to happen when the last two phases work out successfully.
The phases of the blockchain development harden the ETH 2.0 so that the community or developers and validators get the real value of the stake.
Current Progress of the Ethereum 2.0
The roadmap of the ETH 2.0 is missing phases 1.5, 2 in the previous versions of the documents. Therefore, you can take it as the total transition to a new blockchain network, which is going to happen soon. It also represents that the next phase will be the final one with all the important features such as the SNARK/STARK transactions. Different development teams are working on different tasks for the ETH 2.0 network. Therefore, you can expect the results to become visible soon.
However, since the Ethereum-flavored WebAssembly or Ewasm is missing in the roadmap, we are expecting it to come with a VM upgrade. We also expect Ewasm to manage smart contracts more smartly and at the same time, make the network decentralized. There will be Layer 2 solutions for scalability and security, which are SNARK/STARK operations post-quantum crypto and CBC Casper. CBC Casper is an updated version of the transition protocol of the network to the staking model. We are also expecting the Casper solution to show with the next phase release.
When Will ETH 2.0 Fully Launch?
If you check out the release dates of the previous updates of the ETH blockchain, you will notice that the developers are working pretty hard. Given that the latest release of ETH 2.0 is not very far; it is likely to be ruled out in a year. To start a new phase of the ETH 2.0, developers will have to merge Mainnet Ethereum with the Beacon chain. However, this merge is going to take a while to complete and we may not see it before 2022.
There are 33,000 users who have staked almost 1.1 million ETH so far. After the update, the number will go to rise even more. Now everyone is keeping an eye on the mainnet deposit contract and Beacon chain. The primary reason for creating the deposit contract is to make Eth 2.0 more reliable and stable.