Will The Release of Ethereum 2.0 Affect The Price of Ethereum?
2022-05-06 10:23:14
Will Ethereum Go Up?
The world’s second-largest cryptocurrency leadership has been working on a long-term plan to switch from proof-of-work (PoW) to proof-of-stake (PoS) with its update to Ethereum 2.0. The first phase of this development of the ETH 2.0 started in December 2020. To make the Ethereum network more scalable, more secure, and more sustainable, the roadmap contains interconnected protocol upgrades that are being built by multiple teams from across the Ethereum ecosystem. Should you buy Ethereum now before ETH 2.0 will be fully deployed? Will there be any positive impact on the price of Ethereum upon the launch of this version 2.0?
Ethereum is the second-largest digital asset based on market capitalization. It operates as a platform for so many cryptocurrencies and decentralized applications are one of the most popular use cases of Ethereum. Ethereum's live price is up today by 5.41% in a 24-hour trading volume at a price of $2944.09 on the Gate.io global cryptocurrency trading platform. It has a circulating supply of 120,651,002 ETH coins, and the Gate.io trading platform is one of the best platforms to buy, sell, and trade Ethereum tokens very fast and conveniently.
ETH 2.0 is a transition from the Proof-of-Work (PoW) algorithm to Proof-of-Stake (PoS). Like Bitcoin, Ethereum uses the Proof-of-Work (PoW) as its consensus mechanism which involves physical computing power (miners) and electricity (work) to build blocks on the blockchain. These miners use large amounts of electricity to solve complicated problems in exchange for mining rewards. The PoS consensus mechanism is an upgrade of PoW and involves validators also known as virtual miners that hold a financial stake in the network.
PoS provides better security, and improved energy and it is scalable compared to the PoW consensus mechanism. Instead of spending money buying mining facilities and equipment, staking on Ethereum 2.0 will just require a consumer laptop. So Ethereum 2.0 will be eco-friendly.
The Merge (Phase 1): The mainnet Ethereum will need to merge with the Beacon chain stage at some point. This will enable staking for the entire network and signal the end of energy-intensive mining. As of the time of writing this article, ETH 2.0 development is currently at this phase.
Shard chains (Phase 2): This is estimated to be done in 2023 and the goal of this phase will be to expand Ethereum’s capacity to process transactions and store data with time multiple phases that will emerge from this phase.
There is no need to panic if you still hold Ethereum or think that it will affect the Ethereum price, you can still buy Ethereum tokens, you do not need to transfer them to ETH 2.0 after the release of ETH 2.0.
The world’s second-largest cryptocurrency leadership has been working on a long-term plan to switch from proof-of-work (PoW) to proof-of-stake (PoS) with its update to Ethereum 2.0. The first phase of this development of the ETH 2.0 started in December 2020. To make the Ethereum network more scalable, more secure, and more sustainable, the roadmap contains interconnected protocol upgrades that are being built by multiple teams from across the Ethereum ecosystem. Should you buy Ethereum now before ETH 2.0 will be fully deployed? Will there be any positive impact on the price of Ethereum upon the launch of this version 2.0?
Ethereum is the second-largest digital asset based on market capitalization. It operates as a platform for so many cryptocurrencies and decentralized applications are one of the most popular use cases of Ethereum. Ethereum's live price is up today by 5.41% in a 24-hour trading volume at a price of $2944.09 on the Gate.io global cryptocurrency trading platform. It has a circulating supply of 120,651,002 ETH coins, and the Gate.io trading platform is one of the best platforms to buy, sell, and trade Ethereum tokens very fast and conveniently.
Why The Upgrade?
Due to the high utility of the Ethereum network, it is in high demand, and it is very expensive to use. The network needs to offer a better experience to the end-users and network participants, so this upgrade will make the Ethereum network scalable to a decentralized way in as much as it still maintains its sustainability and security, this is the Ethereum vision. Ethereum needs to support 1000s of transactions per second, to make applications faster and cheaper to use. As the adoption of the Ethereum network increases, it calls for an increase in security against all forms of attack. Ethereum needs to be environmentally friendly because our technology today requires too much computing power and energy.ETH 2.0 is a transition from the Proof-of-Work (PoW) algorithm to Proof-of-Stake (PoS). Like Bitcoin, Ethereum uses the Proof-of-Work (PoW) as its consensus mechanism which involves physical computing power (miners) and electricity (work) to build blocks on the blockchain. These miners use large amounts of electricity to solve complicated problems in exchange for mining rewards. The PoS consensus mechanism is an upgrade of PoW and involves validators also known as virtual miners that hold a financial stake in the network.
PoS provides better security, and improved energy and it is scalable compared to the PoW consensus mechanism. Instead of spending money buying mining facilities and equipment, staking on Ethereum 2.0 will just require a consumer laptop. So Ethereum 2.0 will be eco-friendly.
The Three Phases Involved in ETH 2.0 launch
The Beacon chain (Phase 0): This is already live, and this stage brought the staking to Ethereum, laid the groundwork for future upgrades, and will eventually coordinate the new system.The Merge (Phase 1): The mainnet Ethereum will need to merge with the Beacon chain stage at some point. This will enable staking for the entire network and signal the end of energy-intensive mining. As of the time of writing this article, ETH 2.0 development is currently at this phase.
Shard chains (Phase 2): This is estimated to be done in 2023 and the goal of this phase will be to expand Ethereum’s capacity to process transactions and store data with time multiple phases that will emerge from this phase.
There is no need to panic if you still hold Ethereum or think that it will affect the Ethereum price, you can still buy Ethereum tokens, you do not need to transfer them to ETH 2.0 after the release of ETH 2.0.
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