Years of waiting and announcements for the activation of the new Ethereum 2.0 pay off today with the arrival of the Beacon Chain network. This Tuesday is the first step in a long journey that will serve to migrate the consensus type from Proof of Work (PoW) to Proof of Stake (PoS).
The so-called phase 0 of Ethereum 2.0 or “Serenity” will serve to store and manage the registry of all validator nodes. The launch date was confirmed last week after 100% of the ethers (ETH) required for activation were completed.
In total, at least 524,288 ETH was needed in the corresponding smart contract. The figure was exceeded and at the time of publishing this article, the total of funds committed was already 879,800 ETH. To be a validator in the new Ethereum 2.0, the operator must transfer 32 ETH and stay connected to avoid penalties. From the above, it can be inferred that there are already about 27,500 validator nodes.
After the activation and creation of the genesis block in the Beacon Chain, a curious event occurred. The proponent of the first block, after the genesis, left a message that reads: “Mr F was here” (Mr. F was here). What happened was commented on by developer Vitalik Buterin, who was ironic about the message spread.
The Beacon Chain will work in parallel with the current Ethereum blockchain to ensure that there is no information disruption. The tests and evaluations were carried out on the Medalla network, a project developed by the Ethereum Foundation, ConsenSys, and Deep Work Studio.
Ethereum 2.0 will have two major differences from the current network. The first is the change in its consensus mechanism from computing power and electrical energy (PoW), to one based on software and capital.
This change is based on validators and ETH deposits. In other words, it starts from the fact that by committing funds in a smart contract, you have access to the transaction validation software, hence its name Proof of Stake (PoS).
With a greater number of validators, the operation of the network would be more reliable and efficient. Each participant will perform functions for the verification, settlement of transactions, and generation of new blocks, which will lead to incentives to keep the computers running the validation software.
The second difference is the so-called shard chains as a point for the scalability of the project. Today the system operates on a single chain made up of consecutive blocks, which ConsenSys developers say “is incredibly secure and makes information easy to verify.” However, the ability to process transactions quickly would be restricted.
With shard chains, the Ethereum blockchain is “divided” by distributing the information processing among thousands of nodes. The new system would allow transactions to be processed in parallel and not consecutively. The developers illustrate the technique by saying that each shard chain is like adding another lane to a highway on Ethereum, which would currently have only one track. The shard chains would be developed in phase 1 of the project.
Shard chains will increase the capacity of the network by extending it to 64 blockchains. Over time, the Beacon Chain will also be tasked with randomizing validators to certify shard chains. In other words, working “groups” would be formed to speed up the process and, as it is random, the possibility of internal attacks is minimized.
“The main improvement in phase 1 is the integration of the shard chains. Shard chains are a scalability mechanism in which the Ethereum blockchain is’ divided ‘into 64 different chains, allowing for the transaction, storage and processing of information in parallel,’ Consensys explained on its website.
According to the Ethereum 2.0 roadmap, the planning consists of three stages: phase 0 that begins today, phase 1 to be implemented sometime next year, and phase 2 that would go live in 2022.
Although the Beacon Chain will work in parallel with the current main network, it will be separate. However, the developers point out that they will eventually be connected as the plan is to “couple” the main network to the proof-of-stake system that is controlled by the Beacon Chain.
Ethereum currently supports 14 transactions per second, a capacity that has been limited recently by the growth of DeFi. With the new version of the network, up to 100,000 operations per second could be processed, as previously reiterated by the programmer and co-founder of Ethereum, Vitalik Buterin.
Amid all the advancement are companies and initiatives developing clients for Ethereum 2.0. Currently there are at least five programs for the new version of the network, among which are: Prysm, Teku, Nimbus, Lodestar and Lighthouse, according to a report released by CriptoNoticias in September.
It must be emphasized that the Beacon Chain is only the first step of what Ethereum 2.0 will be. The network does not currently handle smart accounts or contracts, but anyone can join as a validator, which would encourage decentralization.
We had planned that with the launch of the version 2.0 of Ethereum the price would arrive in the clouds. However, the above did not happen. With the fluctuations created by Bitcoin trying to break the historical high, we have seen that almost no cryptocurrency has had significant differentiation and patterns that confirm entry opportunities.
At the time of writing this article, the price of Ethereum on the daily chart showed a breakout of the 0.5 Fibo zone and exactly at 614 USD and touching an important downward trend line but within a pattern that could be a double top and within the ABC accumulation pattern. However, a possible ABCDE accumulation is not ruled out, which would be the most natural at this time.