The Beacon Chain

During the end of 2020, the developers of Ethereum launched the Beacon Chain. The Beacon chain was the first step in introducing proof-of-stake to the Ethereum ecosystem, and was designed to eventually serve as the Ethereum 2.0 mainnet. Even though the Beacon chain both stores, coordinates, and manages the registry of Ethereum 2.0 validators, it still functions separately from the Ethereum mainnet. Therefore, its presence doesn’t change anything about Ethereum in its current state.

The Merge

The second stage in the transition from Ethereum to Ethereum 2.0 is known as “The Merge.” The merge represents the point in time in which the Ethereum mainnet merges with the beacon chain. At this phase, both the Ethereum mainnet and beacon chain will begin working together as one entity, rather than hard forking into separate projects, like we’ve seen with so many cryptocurrencies in the past.

The merge was supposed to take place during 2021, but was pushed back and will now be taking place later this year. After the merge takes place, Ethereum will no longer be mined as it currently is. Instead, blocks of Ethereum will be propagated by validators. These validators will be required to stake Ethereum in order to participate in the validation process.

Ethereum and Energy Consumption

One of the biggest pushbacks that proof-of-work cryptocurrencies face is the amount of energy they require to validate transactions. Proof-of-stake cryptocurrencies on the other hand require only a fraction of that same energy to function. When Ethereum upgrades to Ethereum 2.0, the amount of energy that the Ethereum network is using will be drastically reduced.

Currently, the average energy consumption of one single transaction on the Ethereum mainnet is about 238 kilowatt hours, aka KWH. By comparison, the Visa network is capable of conducting 100,000 transactions, while only consuming an average of 144 KWH of energy. When the Ethereum mainnet merges with the beacon chain, the amount of energy that is needed to validate a transaction will be considerably lower.

Sharding

After the merge takes place, the amount of energy consumed will indeed be lower, however the number of transactions per second, or TPS on the Ethereum blockchain will remain the same until the next phase of the transition takes place. This is because the validation of the Ethereum blockchain will still be sequential, until it receives its next upgrade. The next step in the transition to Ethereum 2.0 introduces a parallel computing technology that shares some similarities with directed acyclic graph technology (DAG). This advancement phase of the Ethereum 2.0 transition is known as “Sharding.”

During this phase, Ethereum will be broken into 64 separate blockchains, that will split the workload of the current Ethereum blockchain. These “Shard Chains” will be able to concurrently handle the workload of the current Ethereum blockchain. This new system will both drastically increase the TPS of the Ethereum network, while reducing the hardware requirements needed to validate the transactions that are taking place.

Future Expectations of Ethereum 2.0

There is still a long way to go when looking at the roadmap of Ethereum 2.0’s development, however these components are currently what we are looking at for the majority of Ethereum’s advancement within the near future. Many of the features of Ethereum 2.0 that the community is hoping to see will still only be theoretical until the network reaches the sharding stage of development. At that time, we will be looking at an Ethereum network which will bring us closer than ever to the concept of the first ever decentralized “World Computer” and the possibilities that will come with it!

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