Introduction
Since inception of Ethereum, Vitalik Buterin has envisioned the cryptocurrency utilizing the energy-efficient proof-of-stake network. The process to transition, or “merge” to the new network has slowly been taking place over the last year. In November of 2020, a new chain called the beacon chain launched and began accepting staked ethereum to help build the network. This chain will eventually get merged with the current network, known as mainnet.
Why proof-of-stake?
One criticism of cryptocurrencies in general is the amount of energy that it takes to mine, or authenticate transactions on the network. This system is known as proof-of-work, and has been a reason that graphics cards and other computer parts have been difficult to obtain. A computer, or node, will work to confirm transactions as well as issue new currency into circulation.
With proof-of-stake, the energy consumption is drastically reduced. This is better for the environment, and gives a more positive outlook to the future adoption of crypto. This merge will also include scalability updates for the future, as well as increase security. One can “stake” their ETH, and receive payment for having their money contribute to verifying transactions.
What’s next?
An estimate has been made that the beacon chain will merge with mainnet in the first part of 2022. From there, updates will continue to be made to include things such as shard chains. These chains will launch later in 2022, but will give the ETH network more capacity and will use entirely new code. This will lower node requirements, and make the network more scalable.
There are five main update phases that plan to be rolled out on the network.
Phase 0 (Nov. 2020): Launch of beacon chain and implement proof-of-stake on Ethereum network.
Phase 1: Implementation of shard chains for scalability.
1.5: Merging mainnet (proof-of-work) with beacon chain (proof-of-stake) and end proof-of-work for Ethereum.
Phase 2: Improvements to smart contract execution as well as accounts and transactions.
Beyond: Increase network functionality with features and improvements.
Conclusion
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