Ethereum, the second-largest cryptocurrency by market capitalization, is preparing to update to its second edition Eth 2.0. It will be a huge leap forward for blockchain technology by replacing proof of work mining with proof of stake as well as providing increased speed, efficiency and scalability of the Ethereum network. Eth 2.0 boasts the ability to conduct up to 10,000 transactions per second compared to only 30 per second in the current Eth network. Exciting news for those of us working in the cryptocurrency space.
Move from Proof of Work to Proof of Stake
The biggest part of the Eth 2.0 update is the move away from proof of work as a way of handling transactions on the Etheruem blockchain. Instead of requiring application-specific integrated circuits (ASICs) or Graphics Cards (GPUs) to solve the mathematical equations and transactions, there is going to be a new mechanism to validate transactions on the blockchain. This method is called proof of stake and requires ownership in the network instead of heavy computing power.
To take part in Ethereum’s new proof of stake validating system, one must now hold a significant chunk of Ether, the underlying asset that powers the Etheruem blockchain. Thirty-Two Ether is required to run one validator node on the new Eth 2.0 Beacon Chain. There will still need to be a computer node running to actually compute the network transaction, but it requires significantly less computing power to execute the transaction. This also solves a lot of the impact crypto mining power consumption had on the environment by requiring less power to handle transactions.
Process of Upgrading to Eth 2.0
There will be two networks running at the same time under the Ethereum network. One will be the prior proof of work network that has been running successfully for years. The other will be the previously mentioned Beacon Chain that is the future of Eth 2.0. Both networks will be running in parallel until the final migration that is projected to happen within the next two years.
To participate in the Eth 2.0 Beacon Chain, a user must take their current Ethereum holdings and exchange them for the Eth 2.0 tokens. Once the old tokens are exchanged for the Eth 2.0 tokens, they won’t be able to switch back. They will be locked in the Eth 2.0 Beacon Chain until the merge happens and combines the two chains. Users will have to run computing hardware and obtain Thirty-Two Eth 2.0 tokens to fully participate with the new Ethereum network.
Perpetual’s Advantages with the New Ethereum
Perpetual hopes to expand its presence within the Ethereum 2.0 technology. This upgrade allows for infrastructure that is better optimized for the environment which is at the core of Perpetual’s priorities. It opens the door to even more opportunities for Blockchain applications with the capacity to handle thousands of transactions every second!
Written by:
Evan Witmer
Lead Software & Blockchain Developer
Perpetual Industries Inc.
(OTCMARKETS: PRPI)
