Ethereum adopts the Proof of Stake (PoS) algorithm as a network consensus method.
ETH started the year at $ 135 and is currently trading above $ 500, up more than 270%.
Genesis Ethereum 2.0 Day is officially scheduled for December 1, after the Ethereum 2.0 deposit contracts have delivered a parabolic gain in recent days.
Ethereum 2.0 accepted the first deposit on November 4, but to many investors’ concerns, only 106,240 ETH had been deposited by November 20, while the launch of Ethereum 2.0 required 524,288 ETH.
As the deadline approached, deposits increased and hit the 9-hour target before that date. So far, 16,384 validators have made contributions and 583,552 ETH have been placed. After hitting its target, ETH gained more than 10% in the past day and rose to $ 622, a new high so far, while Bitcoin remained stagnant at $ 18,000. ETH started the year at $ 135, now it is up nearly 350%.
What is Ethereum 2.0?
Ethereum 2.0 is an update that aims to improve scalability, programmability and network security. Once completed, the Ethereum blockchain will fully adopt Proof of Rate (PoS) to protect its network, leaving behind the consensus mechanism known as Proof of Work (PoW) that Ethereum 1.0 uses. The entire process is divided into 4 stages and is to last at least 2 years.
As the second largest cryptocurrency by market capitalization, ETH is famous for its high transaction fee and constant overload. This is because Ethereum 1.0 could only handle around 30 transactions per second. However, with the launch of Ethereum 2.0, up to 100,000 transactions per second could be processed thanks to the shard chain.
Consider driving your car through the city, and the only way to do that is to cross the bridge. At rush hour, everyone would have to queue to cross the bridge, and you are getting more and more furious. You don’t know if it will be minutes or hours before you get home. Suddenly the bridge splits and widens, and soon it turns out that the long line at the front is gone. A journey that once took several hours can now be completed in minutes. The chunk chain works similar to this. Splitting is the process of distributing data to reduce network congestion by creating new chains, also known as shards.
Ethereum 2.0 is also more sustainable and could change the entire ecosystem. The Ethereum 1.0 network consumes a lot of energy as it requires all miners to solve complex math puzzles and verify new transactions, and the first miner to solve a block problem will be rewarded with a cryptocurrency. Instead of working together and the winner takes it all, the PoS system chooses the creator of the new block based on staking, and other validators vouch for the block with pro-rata transaction fees. Therefore, PoS requires less processing power and is a more fair game.
Another advantage of PoS is that it makes 51% of the attack almost impossible or unreasonable for a malicious actor. This is because in order to carry out a 51% attack, a person needs to wager at least 51% of the total amount of ETH in circulation. Buying such a significant amount of cryptocurrencies will undoubtedly attract market attention, not to mention the extremely high cost.
What about the ETH price?
The final phase of Ethereum 2.0 is expected to start in 2021 and is not the end of the Ethereum blockchain. With the launch of Ethereum 2.0, users were able to use Ethereum in a much more economical and efficient way while gaining greater security. The increase in utilization is associated with increased demand that could take the price of ETH to a new level.
“Until Ethereum 2.0 and the solutions work together, the number of transactions will be 100,000 per second. That means a completely hassle-free experience for the next billion people. “.
Jamie Anson, founder of Nifty Orchard and organizer of Ethereum London.
Despite the COVID-19 black swan at the start of the year, the end of 2020 is a step forward for cryptocurrency to rise. With vaccines on the way, clear election results and the plunge in the dollar, the next question is how high can ETH rise?
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