Ethereum has been around for some time now, with the first release in 2015. Since then, it has been considered a major player in the cryptocurrency market. While Ethereum has proven to be a relatively stable project with a large community of developers and users, there are some concerns over its long-term viability as a platform.
The future of Ethereum network
Ethereum has been facing scalability issues for a while now. In fact, it is among the first platforms to face such problems. The Ethereum network has grown rapidly, but the volume of transactions taking place on its network could not be handled by the blockchain.
To solve this issue and make it suitable for large-scale commercial applications, Ethereum merged all its chains into one single chain (Eth 2.0).
This new version of Ethereum, if successful, could support 100,000 transactions per second, compared with Visa’s average of 1,700.
A detailed description of the Ethereum merge
On September 15, 2022, the Ethereum network went live using a proof-of-stake mechanism. Originally, the main Ethereum network used proof-of-work just like Bitcoin, but the upgrade to proof-of-stake was called The Merge.
The Merge refers to the merging of the original Ethereum Mainnet and a separate proof-of-stake blockchain known as the Beacon Chain, which now exists as one chain.
After combining ‘Eth1’s existing proof-of-work chain and ‘Eth2’s proof-of-stake Ethereum chain, it is no longer necessary to distinguish between the two Ethereum networks.
‘Eth1’ has been renamed the “execution layer,” which handles transactions and executions.
‘Eth2’, also known as the “consensus layer,” is in charge of ensuring node consensus by ensuring that block hashing meets certain requirements in order to be considered valid by the EVM (Ethereum Virtual Machine) execution engine.
The Merge will have a number of effects on the Ethereum network.
The introduction of the Beacon Chain will bring a whole new wave of security and scaling to the Ethereum network.
The most important changes are:
- Improved Ethereum upgrades and decentralized scaling, which will make Ethereum more scalable, secure, and decentralized.
- Sharding will increase the number of transactions per second while lowering the amount of power required to run a node and validate the chain.
- Beacon Chain will make Ethereum secure by coordinating validators across a sharded set of data.
- Staking will lower the barrier to participation and limit economies-of-scale, creating a larger, more decentralized network.
- The transition from a Proof-of-Work (PoW) algorithm to a Proof-of stake (POS) will eliminate the need for mining, making Ethereum more energy efficient.
The Beacon Chain will make transactions far more secure while increasing the number of transactions processed per second.
Introducing staking in addition to Beacon Chain removes the ability for high-income participants to take over 51% control of the network, creating a much safer environment for highly functional smart contracts.
Misconceptions following the merge
After The Merge, there were many misconceptions about what had happened and what was going to happen. The Merge was a change in consensus mechanism, not an expansion of network capacity, and was never intended to lower gas fees.
Rollup-centric blockchain development is being prioritized to scale user activity at layer 2 (consensus layer), and make the mainnet a secure decentralized settlement layer. By increasing storage capacity and decreasing transaction fees, rollup transactions will become more affordable. Switching to proof-of-stake is critical to achieving this goal.
Although some slight changes have been made to transaction speed since The Merge, the changes are negligible.
Next on the Ethereum roadmap
The roadmap for Ethereum has undergone numerous changes over the years. The omission of some anticipated features, such as the ability to withdraw staked ETH, has allowed the Ethereum Foundation to streamline and increase focus on a successful transition to proof-of-stake during The Merge.
After The Merge, an update that will let stakeholders withdraw their staked ETH, the Shanghai upgrade will take place.
As a method to scale transaction execution, sharding, or the division of data into smaller, more manageable chunks that can be processed separately from other parts of the dataset, is becoming more and more common.
Ethereum’s sharding plans seek to identify the most efficient method of distributing data from rollup contracts in order to rapidly increase network capacity. With the beacon chain now operational, it is time to increase Ethereum’s data capacity by sharding the network to make it faster and more scalable.
Ethereum continues to make progress
Ethereum is clearly making large strides in the direction of delivering on its initial promise and incorporating these new improvements. As more real-world use cases are built on the Ethereum blockchain and more security features are included to improve its functionality, it is clear that Ethereum still leads as the platform for decentralized applications.