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Definition: Ethereum 2.0


A major upgrade to the Ethereum blockchain that started in late 2020. Ethereum 2.0 (Eth2) is designed to be more scalable (more transactions per second), more secure and more environmentally conscious. Eth2 uses the proof-of-stake (PoS) method of mining instead of proof-of-work (PoW), which has been used by Ethereum and Bitcoin since their inception. Proof-of-work uses a tremendous amount of electricity. In addition, Ethereum 2.0 will be split into 64 separate divisions, known as "shards."

The Upgrade Path
December 2020 was the implementation of the proof-of-stake (PoS) chain entitled Beacon. In October 2021, an upgrade (Altair) took place, which added enhancements. In 2022, Beacon will be split into 64 shards, and the existing Ethereum blockchain (Ethereum 1.0) will become one shard. See Ethereum and proof-of-work algorithm.