Crypto Made Easy | Ethereum 2.0
As the number of people transacting on Ethereum has grown, the blockchain has become, at times, congested. This has driven up the cost of using the network. As ETH continues to grow, a strong need for scaling solutions has become apparent. Here comes what the Ethereum team has coined, ‘The Merge.’
Ethereum 2 (ETH2) is an upgrade to the ETH network that will improve the network’s security and scalability. This upgrade involves a shift in Ethereum’s mining model (“Proof-of-Work”) to a staking model (“Proof-of-Stake”). This will mark the end of proof-of-work for Ethereum, and the full transition to proof-of-stake. This Merge from Ethereum 1.0 to Ethereum 2.0 is expected to reduce Ethereum’s energy consumption by ~99.95%.
The Merge is the most significant upgrade in the history of Ethereum. Extensive testing and bug bounties were undertaken to ensure a safe transition to proof-of-stake. The Merge represents the joining of the existing layer of Ethereum (the Mainnet used today) with its new proof-of-stake consensus layer, the Beacon Chain.
Proof-of-Stake (PoS) is an alternative consensus protocol that eliminates the need for high energy-consumptive computational power. Proof-of-Stake consumes less energy than Proof-of-Work because, rather than requiring computational power to solve a mathematical problem, it allocates the right to validate transactions across different validators based on the percentage of tokens locked by each validator.
It eliminates the need for energy-intensive mining and instead secures the network using staked ETH. This is a big step in realizing the Ethereum vision — more scalability, security, and sustainability.