The main differences about Ethereum vs Ethereum 2.0

For a long time, there has been a planned upgrade of the Ethereum blockchain to make the network more efficient, secure and improve its scalability. This is being done by changing the consensus mechanism, going from the Proof-of-work (PoW) to Proof-of-Stake (PoS). 

Let’s explore the difference between Ethereum and Ethereum 2.0 and explain what these stake consensus mechanisms are all about.

Ethereum 1.0

Ethereum 1.0 is a decentralized blockchain that is based on a peer-to-peer network. It executes and verifies transactions and application codes, known as ‘smart contracts’. The smart contracts allow users to transact between them without a third party such a central authority intervening. 

The transactions made on Ethereum mainnet are immutable and verifiable across this network, providing them full ownership. The transactions are made through the accounts that users have created in the Ethereum network. The sender has to sign transactions and pay Ether (ETH). The crypto currency of this platform. 

In Ethereum 1.0 the mechanism of consensus used is Proof-of-Work. 

Proof-of-work (PoW)

This mechanism of consensus is used in cryptocurrency mining for validating transactions.

It relies on physical computer power, in other words, the ‘miners’ as well as electricity (which is known as the ‘work’) in order to allow block building on the blockchain. 

In the Proof-of-Work system the miners are the ones who have to compete between each other to be the first to solve the complexity of mathematical problems involving each transaction. This requires a large consumption of electricity and computing power.

Ethereum 2.0

Ethereum 2.0 also known as eth 2.0 or Serenity is the first upgrade of Ethereum 1.0. Uses Proof of Stake consensus mechanism. It aims to increase the speed of the transactions, scalability and overall efficiency. It also aims to be more sustainable than ETH 1 as it aims to reduce energy by 99.95%. 

With Ethereum 1, the use PoW required heavy investment in mining hardware, with Ethereum 2.0 it aims to make the participation much easier. It also promises 100,000 transactions per second. 

Proof-of-stake (PoS)

The Proof of Stake consensus is an upgrade that aims to improve scalability, security and be energy efficient. Unlike Proof-of-work, the PoS do not rely on electricity or miners but on validators which are virtual miners. It also will depend on deposits of ether (ETH).

In the Proof-of-stake system, the nodes or validators are the ones who will process all the transactions. As well as create new blocks of data in the same way miners do using the PoW system in Ethereum 1.0. 

The PoS uses an algorithm  that automatically selects the nod that is going to win a block of transaction, meaning there is no fierce competition as in the PoW. Once the node is chosen, it goes to the following blocks in the blockchain.

Also, when choosing the next block creator, the algorithm used in Proof-of-Stake is based on different factors including the duration the coins have been staked, their sizes and even some blockchains using this consensus mechanism also take into account the degree of randomization. Therefore, it gives the opportunity for new and smaller stakes to also have the chance to be selected in the process.  

Will Ethereum 2.0 replace Ethereum?

Ethereum 2.0 is set to replace Ethereum but if you have eth, you will not need to do anything. Ethereum 2.0  will update automatically behind the scenes. 

It was expected to launch in 2020 but there have been some delays that made the launch date be now in 2023. 

The future is promising for Ethereum 2.0 but uncertain as there is much it has changed during the ETH 2 journey. For instance, the layer 2 scaling solutions emerged and had huge popularity. They offered instant solutions for issues found in Ethereum 1.0, instead of waiting for Ethereum 2.0. However, considering the growth of the whole blockchain platform, scaling 2 solutions are not likely to disappear with the arrival of eth 2, but serve as alternatives. 

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