Ethereum 2.0 – Release Date, Effect on Price, and Mining
Ethereum is not the last place in the blockchain ecosystem. Its updated version will be announced very soon, focusing on a confirmation mechanism to verify transactions through a share. Unfortunately, miners usually use complex mathematical functions, also known as hashes. This process requires an ever-increasing amount of electricity. And since it is one of the most advanced networks for blockchain contracts (about one and a half million), reducing its use is almost impossible.
The new version will significantly reduce power consumption. However, experts predict that this will also affect the smart contract. So remind yourself how to create a smart contract and whether it is possible to do with a new Ethereum 2.0. Find out when and what we should expect in our article.
When Should We Expect a New Ethereum Network?
The deployment of Ethereum 2.0 takes place in different phases. Some phases have already taken place, and some are still waiting. Beacon Chain is the first upgrade to go live since December 2020. It brought its own staking to the blockchain, which symbolizes the features of the PoS algorithm of transition mechanism and consensus. But as you can see from the name – Beacon Chain, it is not the main Ethereum network but a separate blockchain.
The blockchain world is preparing for the release of the next phase, which will take place in the second quarter of 2022. Its goal is to unify the Beacon Chain with the main Ethereum network. However, it is not the final phase. A shard chain is also expected, a key aspect of scaling the Ethereum Beacon Chain.
The blockchain will be able to distribute operations among themselves and create new chains, and the speed of transactions will become faster. Also, starting the node will become easier, which means less memory occupied by the device. A full Ethereum update will take place by 2023. However, have you already understood why everyone is so looking forward to the release of ETH 2.0? Check out the main benefits below.
Scalability
Right now, the Ethereum blockchain can support about 15 transactions per second. Another disadvantage is that people have to pay huge transaction costs (high gas fees) due to slow but validated transactions and the network “overheats.”
Ethereum 2.0 is expected to reach more transactions (over 100,000) per second in the future. And shard chains can help to achieve such a result.
Security
Security is an important feature of Ethereum 2.0. Most PoS networks have a small set of validators, which makes the system centralized and reduces network security. Eth 2.0 requires at least 16,384 validators, making it more decentralized and secure.
Ethereum 2.0 code security checks are performed by organizations such as blockchain security firms. The Ethereum Foundation has also created a dedicated Ethereum 2.0 security team to investigate potential cybersecurity issues in cryptocurrencies.
Test Network
Ethereum holders could stake ETH on the testnet, and the staking means an investor purchases cryptocurrency and keeps it in the wallet for a certain time. It is like a passive income. They need to invest at least 32 ETH, which helps to manage the validator node. These investments are fixed for the official release of Ethereum 2.0.
Betting on ETH 2.0 comes with some risk, but after firing, it will operate entirely on the PoS algorithm, and the Ethereum merge will happen through the test network.
Proof of Stake and Mining Process
Ethereum needs to verify transactions in its decentralized way. Verification is supported by a consensus mechanism, which in the case of Ethereum is proof-of-work consensus.
In the case of solving complex mathematical puzzles and any new transaction, Ethereum miners need to use supercomputers and their processing power. The first miner solving the puzzle adds new transactions to the ledger of transactions that make up the blockchain. Then the miners receive an Ethereum currency as a reward. However, the proof-of-work process is energy-intensive and harmful to the climate.
Proof of Stake has a different role because users of the crypto market can become network validators. By investing in any digital asset, they can verify trades. Since validators invest heavily in the currency, their chances of approving fraudulent transactions are slim. In addition, proof of stake is more energy efficient than the current Proof of Work model. Therefore, much computing power is not required to secure the Ethereum blockchain.
Key Predictions of Ethereum’s Price
Since there are many more updates, they could affect the Ethereum price. So let’s do our own research on how crypto experts see the impact of the major update on the price of Ethereum.
- Crisp Nyagi – $2,500;
- Simon Dedik –$3,000;
- PrevisioniBitcoin – $4,740;
- Coinpedia – $8,000;
- DigitalCoinPrice – $9,400.
However, the opinions expressed differ from the prediction made by Brian Shuster. He predicts that the average price of Ethereum will be $100,000 per coin. It means the total market capitalization of the Ethereum ecosystem will be around $10 trillion.
Is There Any Connection Between Ethereum 2.0 and Smart Contracts?
With the Ethereum 2.0 update in the second half of 2022, the blockchain network intends to move to a PoS consensus mechanism. This network change will introduce new consensus mechanisms and sharding as a scalability option. In addition, the existing Ethereum chain will also implement the Beacon Chain and serve as the consensus layer for smart contracts to interact on other networks.
Ethereum 2.0: What Will Happen?
The future Ethereum will allow this profitable global decentralized smart contract system to move forward because a centralized system| will lead to decreased network security. In addition, it will help with a vision of speed, reduce its carbon footprint and level the playing field for investors by making their stake in ETH.
Ethereum 2.0 is a necessary update to the blockchain technology most commonly used for any smart contract. Thus, the scalability of the Ethereum 2.0 network will surely attract more users, making it a favorite service.
FAQ
Ethereum 2.0 raises dozens of questions that investors are trying to find answers to. The new network was announced several years ago, but its long launch caused mistrust and misunderstanding. Therefore, we have collected the top 5 questions and given answers to them.
Ethereum 2.0 is one of the significant updates to the entire network. Therefore, it will not change the amount of ETH and will not become a new coin. Undoubtedly, the blockchain technology itself will experience positive changes and will have an impact on the price. But all old network coin holders will not lose their investment.
The platform will continue to operate, and all investments will be automatically transferred to the new network. It will be the same Ethereum but more advanced with new blocks, higher speed, and reasonable energy use.
Proof of work is the name of the mechanism by which Bitcoin and Ethereum were able to reach consensus and seamlessly add the verified transactions of both networks to new blocks through the systematization of the process. With the full update of Ethereum, proof of work will be replaced by proof of stake.
Each new miner adds a new transaction to the list. So, all these chains make up the blog chain. They are then endowed with their cryptocurrency network. Since it is a fairly energy-intensive procedure for an Ethereum Virtual Machine, appropriate upgrades will help reduce energy consumption.
Since the first upgrade, returning to the previous data has been impossible. Restarting networks means creating new, improved transaction processing mechanisms. And once the latest version is fully launched, there will be no going back to the original Ethereum Mainnet. However, Ethereum miners can return from phase to phase.