Ethereum’s (Remaining) Journey to Ethereum 2.0
Ethereum’s journey to becoming a high-performance blockchain has been long and arduous but may soon become a reality with the launch of Ethereum 2.0. The multi-stage network upgrade is expected to bring several changes that will make the crypto network more secure, scalable, and sustainable.
Read on to learn about the state of Ethereum on its journey to version 2.0.
Early History of Ethereum
Ethereum is the second-largest cryptocurrency network by market capitalization. It was first conceptualized in 2013 as a smart contract computing platform that would enable the creation of decentralized applications (DApps).
This development was partly in response to Bitcoin’s shortcoming in the area of programmable apps. Initially, the plan was to build a layer on top of the Bitcoin network to enable smart contract functionality.
However, this idea failed to gain traction in the Bitcoin community and was eventually discarded. As a result, Vitalik Buterin, Ethereum’s creator, and a team of developers decided to build a new blockchain network altogether.
The concept began to take off in 2014 with Ethereum launching an ICO to fund the initial development phase. The token sale managed to raise over $18 million worth of ether (ETH).
Later in the year, Ethereum founders and developers came up with a road map that would oversee the development of the protocol in four phases. Each phase represented a necessary systemic upgrade of the network, at which point older versions become obsolete. Within the main phases, there have been many sub-upgrades to the network.
Let’s take a look at the execution of the Ethereum road map so far.
The Ethereum Road Map
July 30, 2015 — March 14, 2016
Frontier phase: Implementing the basic technical foundation
The first version of Ethereum was launched in July 2015 and was known as Frontier. It served two main purposes: to allow users to mine ETH and run smart contracts.
Ethereum launched as a proof-of-work (PoW) network and allowed developers to test decentralized applications.
March 14, 2016 — October 16, 2017
Homestead phase: Improving infrastructure to secure the network
Ethereum’s security vulnerability was revealed during the DAO hack. Founded in 2016, the DAO was a decentralized autonomous organization on the Ethereum blockchain. After raising $150 million worth of ETH through a token sale, hackers exploited vulnerabilities in the smart contract code to steal a portion of the funds.
The Ethereum network was eventually hard forked to recoup the stolen funds, but part of the community disagreed with the decision, and the result was the network being split into blockchains: Ethereum and Ethereum Classic.
Two sub upgrades - Tangerine and Spurious Dragon - were released after the network suffered several Denial of Service (DoS) attacks. The updates adjusted gas fees and introduced state clearing.
October 16, 2017 — January 2, 2020
Metropolis phase: Solving challenges arising from growth and expansion
The Byzantium upgrade introduced the Ethereum improvement protocols (EIP), which included features such as zk-SNARKS, the difficulty bomb, and account abstraction.
The Constantinople upgrade was meant to fix any problems that may arise from Byzantium’s implementation and lay the foundation for the transition from proof-of-work (PoW) to proof-of-stake (PoS).
January 2, 2020 — current
Serenity Phase: Introduction of Ethereum 2.0
- Presently, the Serenity stage is still in implementation. The goal of version 2.0 of the network is to advance Ethereum to a point at which it can be used widely without experiencing any security or network ‘clogging’ issues.
Why Ethereum 2.0?
The Ethereum protocol has been an undeniable success since its launch in 2015. The blockchain network is popular for the development of DApps, DeFi applications, and minting NFTs. However, the growth of the network has posed some structural challenges that limit its scalability.
Key among them is the capability of the network to process a high number of transactions. The large volume of transactions is driving up transaction fees and clogging the system since users need to pay high gas fees to get their transactions validated.
Another issue is the underlying proof-of-work consensus mechanism, which keeps the network decentralized and secure, but consumes large amounts of energy. The resulting environmental impact cannot be ignored.
The Serenity Upgrade
A common misconception of Ethereum 2.0 is that a hard fork will occur or a brand new cryptocurrency will be created. This is not accurate as most of the changes will happen at the backend, with technical improvements that will not register on the surface but have overall ramifications for the network.
Ethereum 2.0 will result in the blockchain transitioning from the proof-of-work consensus mechanism, which relies on miners to confirm transactions, to a proof-of-stake system where validators stake ETH to verify transactions and add new blocks to the chain.
Ethereum 2.0 is said to introduce ‘sharding,’ which will ultimately boost the number of transactions that can be handled simultaneously.
Sharding involves dividing the Ethereum mainnet into numerous tiny shards that run beside each other. Instead of transactions being processed in succession, they are handled at the same time.
Think of Ethereum as a single lane, and each shard chain is like adding a lane to the network to upgrade it into a multiple-lane highway. In other words, additional lanes and parallel processing lead to much higher output.
However, sharding poses a security risk if implemented poorly. Since fewer validators will be needed to secure the mini shard chains, they risk being hijacked by bad actors.
The Ethereum 2.0 Roadmap
Ethereum’s 2.0 release is being implemented into distinct phases: the beacon change, the merge, and shard chains.
Let us examine what each phase entails:
The Beacon Change was first launched in December 2020 and introduced the Beacon Chain, which was responsible for delivering the PoS mechanism, managing the validators, as well as administering incentives and penalties.
The Merge is slated to happen at some point in 2021 during which the Beacon Chain and the mainnet will merge and put an end to PoW.
Shard Chains will intensify the scaling of Ethereum, as transactions can be split across multiple chains. This is scheduled for 2022.
Ethereum’s 2.0 current plans are not set in stone and, as is the case with technical implementations, are subject to change. Currently, hundreds of developers are involved with this project under the direction of the Ethereum Foundation.
Ethereum 2.0 Launch Date
Ethereum 2.0 was initially planned for a 2019 release. However, this wasn’t to be. Instead, the first phase was launched in December 2020.
With the remaining two phases yet to be fully implemented, it is estimated that the full release of Ethereum 2.0 will happen in 2022.
Therefore, we can infer the full launch of Ethereum is still uncertain, though unscheduled upgrades can happen from time to time.