ETH 2.0 unraveling
Ethereum 2.0 is an upgrade to the Ethereum network that increases the speed, efficiency, and scalability of the network while maintaining security and decentralization. The upgrade is very important to Ethereum, and it will consist of three main phases:
Phase 0 — Deployment and staking on the Beacon Chain.
Phase 1 - Fragmentation Framework
Phase 2 - Merger between Beacon Chain and Mainnet.
The key changes that ETH 2.0 brings to the network are:
Sharding - Ethereum will be split into 18 "shards" that run concurrently. This will greatly improve efficiency.
Staking - A complete overhaul of consensus protocols from Proof of Work to Proof of Stake.
Ethereum's Current Limits
Ethereum currently employs Proof-of-Work (“PoW”) consensus. The motivation for Ethereum 2.0 stems from the limitations of the current network.
high operating costs
The economic problem with proof of work is that the barrier to entry is high. In fact, the initial cost of the hardware required to profitably mine Ethereum is high, barring the electricity cost for users to join a mining pool.
high energy consumption
centralization risk
centralization risk
Higher start-up costs can also lead miners to join pools or economies of scale where large miners dominate. This leads to centralization of miners, which negates some of the security provided by PoW systems.
extension limit
Also, PoW is harder to scale because processing power is limited by the sequential mining of each block, and the block size is limited. If the number of pending transactions exceeds the block size limit, any remaining transactions are queued for the next block. The Ethereum network is currently only able to handle about 15 transactions per second, which is far too little considering the growing demands of the network.
High user cost
Network congestion caused by scalability issues greatly increases the cost of transactions for users on the network.
Proof of Stake Process on Ethereum 2.0
Proof of Stake replaces miners and electricity with validators and stake. Validators replace miners as individuals maintaining the state of the network. On Ethereum 2.0, validators are required to commit 32 ETH to the official deposit contract as the legitimacy of their intent.
How PoS works on Ethereum
1. Blocks can be created in each time slot for 12 seconds.
2. The network randomly selects a validator as the proposer for each slot.
3. If the designated validator misses the chance to propose a block, the network will have no block for that slot and move on to the next slot.
4. During each slot, validators will take turns submitting proofs (voting to the main chain).
5. Vote for blocks in each epoch (an epoch is 6.4 minutes and consists of 32 slots).
6. Each validator submits their proof once per epoch.
7. Finalization takes at least 2 epochs (≈ 12.8 minutes).
8. Validators will also monitor each other for malicious behavior.
9. They can alert the network if they observe another validator proposing two blocks in the same slot or submitting a proof vote that contradicts itself.
10. The network will reward whistleblowers and punish violators.
11. Every period deals with rewards, penalties and cuts. Inflationary rewards are validators earning ETH for doing work. Properly submitting proofs and including other validator proofs when proposing blocks yields 2% to 22% staking rewards, depending on how much the entire network is staking.
12. If a validator fails to stay online and perform their share of computational responsibilities, their block reward will be reduced modestly (67K Gwei lost for each epoch they are offline) to incentivize validators to stay online as much as possible. The penalty amount is intentionally set low so that honest validators with low connectivity can still receive positive staking rewards.
Advantages over PoW
more economical
Unlike the PoW mechanism (Proof of Work), which requires an investment in electrical hardware and expensive graphics cards, miners burn electricity or other energy sources to expend physical energy (called hash power) to confirm. The cost of staking is lower, and validators seeking to redeem their investments can withdraw their staked ETH liquidity resources.
more secure network
On PoS networks, the economic penalties (strikes) for malicious actors are stronger. In PoW, the economic risk of an attack failure is equal to the cost of electricity and the borrowed computing power, while in PoS, the cost of launching an attack is equal to the amount of pledged ETH. If a validator attempts to launch an attack to disrupt the network, their staked 32 ETH will be slashed (removed and burned). Punishable offenses include proposing two blocks at the same location or submitting conflicting proof votes. In the case of a successful attack where a large amount of ETH is stolen, the network would be compromised and the value of ETH could drop, making the attack less financially successful. Once a validator is slashed, that validator is automatically forced out of the active validator set after 8,192 epochs (≈ 36 days). This validator will also reduce their ETH balance each epoch until they exit the active set. Slashed validators will see their ETH balance reduced from 3% to 10%, depending on the collateralization ratio and the number of validators slashed in a similar time frame.
A higher level of decentralization also improves security by requiring at least 16,384 active validator nodes (approximately 8,000 existed before the beacon chain launched).
Low barriers to participation
The company also offers staking services for customers who choose not to run their own validator nodes. As with mining pools, individuals wishing to stake less than 32 ETH can join a staking pool, where their funds are pooled with other people's funds to reach the required 32 ETH. Their rewards are proportional to the total contribution.
Reduce energy consumption
Fragmentation
Fragmentation
The increased scalability comes from a horizontal processing technique called sharding. Sharding is the process of splitting a database horizontally to spread the load and attempts to solve the trilemma faced by blockchain systems:
In current blockchains, the entire network must be verified by all participating nodes after every transaction, so processing speed is limited by the speed of its slowest participant. This creates bottlenecks, increases transaction costs and requires more computing power and storage.
Through sharding, the network will break down the verification of state and history into smaller parts (shards), and nodes focus on validating a subset of the data received (shards) rather than the entire blockchain, eliminating the need to store the entire ether Square blockchain. This process of parallel processing optimizes the overall processing and storage capacity of the network, greatly increasing it. Anyone can run a node capable of sharding, and the hardware requirements are lower than running a full node, increasing network participation. Sharding will continue to keep the network decentralized.
As with the current system, there will still be variance in how strict validators are.
Phases of ETH2.0
Eth2 will be rolled out in stages, with Phase 0 launched on December 1, 2020.
stage 0
Phase 0 is the launch of the beacon chain, which will implement a PoS consensus mechanism.
The beacon chain coordinates the registration of validators.
With the launch of Phase 0, a new token ETH2 emerged.
Users of Ethereum will be able to convert to ETH2 at a 1:1 ratio through a registered contract that burns ETH in their current wallet.
Users will be given a withdrawal key and a validator key.
You need to mortgage 32 ETH2 to become a verifier on the beacon chain.
ETH 2.0 has a deadline and users will not be able to withdraw it until the first phase.
The beacon chain does not currently handle accounts, transactions, storage, or smart contracts.
Currently an independent network running in parallel to the current Ethereum system, ensuring data continuity is not interrupted.
Eventually, the beacon chain will merge with the traditional Ethereum chain to become the main settlement layer of the Ethereum network and coordinate shard chains.
So how does the beacon chain consensus form?
At least 128 validators are required to attest to each shard block, which is called a committee. Each shard block will be proposed and validated within a time frame called a slot. The committee proposes and validates for 32 slots at a time—collectively known as an epoch—after which the committee is disbanded and a new set of validators will be selected. This is done so that malicious validators cannot control the final outcome of new proposed blocks.
When a shard block proposal has sufficient attestation from the committee, it shares a crosslink with the beacon chain. This crosslink is a summary of the state of the shard, which includes new blocks and their transactions.
stage 1
The first phase will implement a shard chain controlled by the beacon chain.
Before Phase 2, there will be no support for accounts or smart contracts.
Phase 1 is expected to start with 64 shards first.
Ultimately, sidechains will be fully functional.
stage 2
A bridge is built between these two environments, the Beacon Chain and traditional Ethereum.
The Ethereum 1.0 blockchain will be one of 64 shard chains, all of which will run using the new Ethereum PoS protocol.
The Ethereum 1.0 mainnet shard will provide the history and current state of Ethereum to the beacon chain.
During this time, dApps will want to start building on the Beacon Chain.
eWASM to replace EVM.
in conclusion
in conclusion
Once ETH2.0 launches, you will use the Ethereum network in the same way, but it will be faster, cheaper, and allow for more possibilities on the blockchain. Anyone can become a validator and earn money by staking their ETH while supporting the network by keeping it stable and secure. This is a big step towards a better Ethereum and will be a big step in blockchain/cryptocurrency history.
