Ethereum Network Updates: Here’s Everything You Need To Know
The Ethereum network which launched in 2015 as a crypto asset provider has since developed into a formidable blockchain and cryptocurrency, second only to the flagship cryptocurrency, Bitcoin. When it comes to smart contracts, DApps, tokenization, DeFi, NFT, protocols, and other applications of blockchain technology, Ethereum is by far the most popular network of choice.
Despite being the forerunner of progressive blockchain innovations that have revolutionized the crypto market, Ethereum has been faced with many challenges over the years. The blockchain has a history of massive amounts of energy consumption required to complete transactions, security issues, scalability limitations, and the infamous, dreadful Ethereum gas fees that continue to ravage the crypto community.
What The Ethereum Updates Are All About
The Ethereum development team is not careless about the problems plaguing the network or slack in their efforts to enhance the blockchain. The Ethereum updates, otherwise known as Ethereum 2.0, or ETH2, is a set of upgrades to the Ethereum network that improve its scalability, security, and sustainability. The upgrade includes a change in Ethereum’s consensus mechanism, which will move it away from the proof-of-work consensus to the proof-of-stake consensus. Miners in Bitcoin and other cryptocurrencies using the Proof-of-Work (PoW) method must first solve cryptographic problems before adding transaction blocks to a chain. The amount of computational power needed, the expense, and the inability to scale to the needed daily transaction volumes on the blockchain all make this an inefficient method.
Instead of miners or other costly and time-consuming computational resources, Ethereum’s proof of stake system relies on nodes called “validators” to verify transactions. By staking a piece of their Ethereum for a predetermined period, validators help complete transactions and keep the network secure. Under the new protocol, anyone with at least 32 ETH can become a validator, with a higher probability of being selected to validate transactions if they stake more ETH. In addition, a portion of the transaction fees would be given to validators as compensation rather than block rewards.
Introduction of The Beacon Chain
Since staking is the foundation of PoS, the upgrade was officially initiated with the launch of the Beacon chain in December 2020. To stake Ethereum, the network’s native token, the Beacon chain acts as a consensus mechanism and a Consensus Layer (CL) for the Ethereum blockchain.
The Beacon chain was originally a separate blockchain from the Ethereum mainnet (also known as the “main blockchain”) that powers the network’s underlying Execution Layer (EL). By connecting the advantages of the Beacon chain with the mainnet, the “Merge” of the Consensus Layer and the Execution Layer enables a fully functional Proof of Stake consensus process on the Ethereum blockchain.
The Ethereum Merge Update
Before the “Merge” really occurred, it was a hot topic of discussion in the crypto community, so it came as no surprise that the cryptocurrency market immediately went into a frenzy when the day eventually arrived. The shift from Ethereum’s PoW consensus mechanism to the more energy-efficient PoS model was widely monitored by investors, business experts, industry stakeholders, and critics alike. Specifically, on September 15 at roughly 1:40 a.m. EST, almost 41,000 individuals watched the “Ethereum Mainnet Merge Party” as it unfolded live on YouTube.
The event generated a lot of buzz, and many prominent industry leaders and market analysts shared their thoughts on it. Erik Voorhees, the founder of ShapeShift, referred to the Merge as the “most consequential event in cryptocurrency history since the release of the Bitcoin whitepaper” in a tweet. At the conclusion of the Merge, Ethereum co-founder Vitalik Buterin hurriedly updated his Twitter with the words “And we finalized! Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.”
Overall, the merge was successful, with the blockchain’s transition from the PoW model, which relied on miners, to the PoS consensus, which relies on stakers, occurring without a hitch. Since the network will no longer be mining using the energy-intensive computers that were employed when the network used a PoW consensus, the network’s energy usage will drop by an astronomical amount.
The Crypto Carbon Ratings Institute (CCRI) confirmed in a report released after the fact that Ethereum’s energy usage and carbon footprint dropped by a whopping 99.99%. Digiconomist, founded by Alex de Vries and best known for its Electricity Consumption Indices, also predicted that the network could save 99.98% of its current energy consumption with the new blockchain consensus, turning it into what is currently being called “Green Ethereum.”
Other Upcoming Ethereum Updates
At the Ethereum Community Conference in France, Vitalik Buterin announced that despite the excitement surrounding the Ethereum Merge, the network would continue to see more upgrades in the future. The upcoming updates, which he referred to at the time as the “keyboards of Ethereum scaling, cleanup, and evolution,” will be termed “surge,” “verge,” “purge,” and “splurge,” he said. Many people initially saw Vitalik’s choice of terminology as rhythmic and humorous. However, just a few days ago, Vitalik posted an image of the upcoming Ethereum updates on Twitter with these titles, along with the comment “Updated roadmap diagram!”
Updated roadmap diagram! pic.twitter.com/MT9BKgYcJH
— vitalik.eth (@VitalikButerin) November 4, 2022
As shown in the image, there are five (5) more updates that will follow, which should conclude in a fully optimal Ethereum network.
The Surge: This update is expected to increase the current transactions per second (TPS) of 30 transactions with a block time of 13 seconds up to 100,000 TPS with a block time of 12 seconds.
The Scourge: This update is to ensure that transaction inclusion is credible and reliable. It is expected to help avoid centralization and other risks from the maximal extractable value (MEV).
The Verge: This update will usher in a fully SNARKed Ethereum blockchain, where block verification is a lot easier.
The Purge: This update will enable the option to clear old history, which will limit cost, eliminate technical debt, and simplify the protocol.
The Splurge: This final update is set to clean up every other lurking issue on the network, as well as Mark the end of the Ethereum Virtual Machine (EVM).
Sharding is an interesting and essential feature that will soon be added to the network. Distributing the network’s workload and processing capacity across numerous “shards,” each with its own set of smart contracts and ledgers, would increase the speed at which Ethereum transactions are processed and allow for the addition of multiple transactions to the blockchain simultaneously.
When combined with sharding, Ethereum’s fresh PoS consensus may improve the network’s scalability issue and lower gas fees. This would be very helpful for the Ethereum community as a whole and would inspire trust among users and developers looking to create decentralized applications, protocols, and other projects on the Ethereum blockchain.