What is Ethereum 2.0?

Ethereum 2.0 is intended to be the next critical development in an Ethereum blockchain that will scale, secure, and sustain the network much better. At present, Ethereum depends on Proof of Work-based consensus; this is energy-intensive and hence has very limited processing capabilities in terms of transactions. Ethereum 2.0 upgrades the network to Proof of Stake, in which validators are chosen to create new blocks based on how much cryptocurrency they've staked-not computational resources.

To this end, one of the key features of Ethereum 2.0 is the so-called sharding, which means the division of the blockchain into pieces that for the most part would run parallel and process lots of transactions at one time. This would exponentially scale up the network throughput by enabling Ethereum to support thousands of transactions per second, as opposed to the current system, which can handle around 15-30 transactions per second.

Another important transition is the introduction of the Beacon Chain that coordinates the network of validators in this Proof of Stake system. The release of the Beacon Chain in December 2020 was the first phase of release that transitioned Ethereum into Ethereum 2.0.

This upgrade is important in order to further reduce energy consumption by more than 99%, while at the same time making Ethereum much more performant. Ethereum 2.0 represents an architecture for scaling up the blockchain into one highly scalable, secure, and much greener to meet growing demands for dApps, DeFi, and NFTs.

Thanks

src

~ Nesaty