Although Ethereum is a highly technologically advanced blockchain-based platform, it is not devoid of drawbacks. To be exact, it lacks scalability and fast transaction speeds. For this reason, Ethereum 2.0 roadmap 2020 includes a few highly important updates designed to change the platform’s infrastructure. The upcoming upgrade is called the Istanbul Hard Fork – this is when the switch to Ethereum 2.0 version will happen. What’s hidden behind that code name? Let’s figure it out.
Istanbul Hard Fork to End Ethereum 1.0 Phase
Ethereum is at a crossroads. In its current state, it has failed to provide viable solutions for corporate clients, and faces threats from the competition and the growing impatience of investors and developers. In an effort to address these issues, the developers of the Ethereum hard fork project plan to make two major network upgrades in the next few months.
The first of these, Istanbul, is a hard fork, which is scheduled to take place in Q4 2019 and will complete the development of the Metropolis stage.
The second, much more serious upgrade is called Ethereum Serenity (or Ethereum 2.0), and is due to begin in January 2020. The Serenity update will launch a brand new blockchain with new core features, such as the Proof-of-Stake algorithm.
Does it mean Ethereum 1.0 will cease to exist?
For project tokens and Dapps based on Ethereum 1.0, this short-term roadmap is a cause for both optimism and concern. Both network upgrades offer improved efficiency, allowing Ethereum to process more transactions in shorter time intervals with greater security while maintaining the core values of decentralization and sustainable consensus.
The Ethereum Community has divided into two groups each coming up with a different scenario:
Most likely, Ethereum and ETH fork 2.0 will operate as two separate but interlinked blockchains, each with its own token.
Alternatively, Ethereum will be included as the Shard of Ether 2.0. The situation is similar to the controversial debate of Bitcoin Segwit2x 2017.
Miners still do not believe that the proposed transition from PoW to PoS is viable, and they are concerned that the ETH value will fall. Meanwhile, the Ethereum community is concerned about the prospect of redistributing existing Ethereum-based projects onto a new chain.
What is Ethereum Blockchain 2.0?
Ethereum 2.0, which is supposed to appear as a result of the Serenity network update, actually means the implementation of the whole global computer. It means Ethereum will be a decentralized blockchain platform that supports thousands of transactions per second while staying cheap and energy-efficient.
To implement this strategy, the team under Vitalik Buterin’s guidance plans to:
Migrate the Ethereum blockchain to Proof-of-Stake algorithm, which does not require large amounts of processing power or energy.
Introduce the concept of Ethereum sharding, which implies the creation of a huge number of parallel blockchains that process transactions independently, but are linked by a common network and a shared history of operations.
Sharding technology has already been tested and implemented in the main network of Zilliqa cryptocurrency. Once its Proof-of-Stake algorithm is leveraged, Ethereum company will follow Zilliqa’s lead. This is where the difficulties begin, as it is necessary to maintain network security, scalability, and decentralization all at the same time.
Ethereum Beacon Chain – Serenity Phase 0
Beacon Chain is the main component of the Ethereum 2.0 process. With the help of this blockchain, the Ethereum network will switch to the Proof of Stake consensus algorithm.
Beacon Chain’s aim is to ensure effective coordination of the POW and POS networks, and it is also responsible for communication with Shard Chains(a subnetwork system for scaling) and Virtual Machine.
Beacon Chain’s functionalities include:
assigning and monitoring validators;
selecting the creator of the next unit;
distributing rewards for maintaining the network;
imposing penalties on dishonest validators;
and other functions.
Thus, in Ethereum 2.0 Shard Chain will provide scalability of the blockchain, and Beacon Chain will become a network supervisor to ensure that everything goes smoothly.
Ethereum Sharding – Serenity Phase 1
To put it simply, sharding is used to divide transactions into “shards”. Each node in the network processes not the entire block, but only its components. This allows the network to process transactions faster and for it to be scaled.
Although the implementation of sharding is still in progress, the Ethereum team has stated that the fragments will not be constant. The protocol has a built-in load balancing process that moves objects between the shards (fragments):
If the shard becomes too large or requires too much gas (inner token), it can be divided in half;
If two fragments become too small and at the same time often communicate with each other, they can be combined;
If all fragments become too small, one fragment can be removed and its contents moved to other fragments, etc.
eWASM – Serenity Phase 2
Ethereum 2.0 will be implemented in full force during phase 2. At this stage, account balances, smart contract execution, and other network features will be added. The biggest improvement in Phase 2 includes the integration of EWASM (Ethereum Flavored WebAssembly), which is the next Ethereum Virtual Machine (EVM) specification based on WebAssembly.
EWASM will allow for faster code execution as well as provide an improved development environment. The main reason for this is attracting developers, so they can write smart contracts in C, C++, Rust and Go, and provide access to the tools of the WASM version.
Continued Improvement – Serenity Phase 3
Unfortunately, there is not much information about the third phase of Ethereum 2.0 and further plans. The official Ethereum Sharding FAQ describes Phases 3-6 only briefly. According to the roadmap, Ethereum will add a number of features that will turn Serenity into a fully scalable network.
The following technologies will be implemented:
Ethereum 2.0 “Serenity” Expectations
What do people expect from Ethereum 2.0? The opinions differ.
Many admit that Serenity is a technologically ambitious plan that should lead to the creation of a new world computer. If the developers manage to realize their ideas, the blockchain of a truly scalable smart-contract network will be created, complete with a fairly diverse asset base that can attract developers, investors and users.
Others don’t share the optimistic outlook and can only see the drawbacks:
Besides that, ETH holders and investors are also worried about their assets. Will ETH1 be equal in price to ETH2? Only time will tell, but it’s clear that after the switch to Ethereum 2.0, the Ethereum 1.0 will still be supported for 5 more years –the two projects will exist side-by-side.