A dramatic change to the Ethereum blockchain protocol that began testing in late 2020 and went live on September 15, 2022 (the "Merge").
Dubbed "Serenity," Ethereum 2.0 (Eth2) was designed to be more secure, far more environmentally conscious and highly scalable from a few dozen transactions per second to tens of thousands. Ethereum 2.0 uses a proof-of-stake (PoS) consensus mechanism instead of proof-of-work (PoW), which has been used by both Ethereum 1.0 and Bitcoin since their inception. Proof-of-work uses a tremendous amount of electricity to process transactions, which Ethereum 2.0 cut by 99%. In addition, Ethereum 2.0 transaction fees (gas fees) were designed to be considerably lower. See Ethereum
and proof-of-work algorithm
Locking Up (Staking) Ether to Participate
Entities that want to mine Ethereum 2.0 become Ethereum "validators" and must lock up 32 ether for the privilege. This can be a single user or a "staking pool" that combines ether from a group of people. In addition, a third-party "staking-as-a-service" enables people with the required ether but without technical knowledge to have an Ethereum 2.0 validator node run on their behalf.
Proposers and Attesters
Dramatically different from the previous consensus mechanism, every node in Ethereum 2.0 is a validator. Randomness is used to select the winning miner, known as a "proposer." The remaining validators are "attesters," which was the validating function in Ethereum 1.0.
Not Everyone Is Thrilled
Anybody with a computer and fast GPU could be an Ethereum 1.0 proof-of-work miner. However, an Ethereum 2.0 proof-of-stake miner (more precisely an Ethereum validator) requires investing thousands of dollars. See Ethash
and ASIC resistant
Ethereum inventor Vitalik Buterin must like rhymes because he announced the following Ethereum 2.0 phases. Each phase has stages.
Merge Merge Beacon chain
Surge Divide network (sharding)
Verge Change hash (see Verkle tree).
Purge Lessen chain size
Splurge Future enhancements
From Eth1 to Eth2
The Beacon chain was designed to bring Ethereum 2.0 validators on board with staking. On September 15, 2022, Ethereum 1.0 blocks merged into Ethereum 2.0. When it splits into 64 shards (divisions), Ethereum will handle 64 times the workload. See blockchain sharding