Ethereum 2.0 and its Highly Anticipated Release

Ethereum is as close as it has ever been to being the number one largest cryptocurrency in the world behind Bitcoin. Although, admittedly, there remains quite a gap between Bitcoin’s market share and Ethereum’s, that gap has closed significantly since the beginning of 2021.

Many more users have flooded to Ethereum’s network for a variety of reasons. While good news for Ethereum’s overall market capitalisation and for the price of its native token Ether (ETH), the network’s rapidly growing popularity has well and truly exposed the Ethereum blockchain’s vulnerabilities and limitations.

Ethereum’s developers have been aware of the platform’s shortcomings for some time – it is, after all, an old network, which has endured prolonged and increasingly added pressure for a while as more and more users adopt its outdated blockchain technology.

This is why its developers decided some time ago that it was time for the system to be updated. After all, one of the key differences between it and its predecessor- Bitcoin- is that its smart contract-driven system allows for upgrades, amongst other things.

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What’s The Story on Ethereum 2.0?

Clearly, Ethereum 2.0 - otherwise known as Serenity – is taking longer than expected to launch at its full capacity.

Ethereum’s cofounder, Vitalik Buterin, admitted as much, saying that the platform’s transfer from a proof-of-work (PoW) consensus to a proof-of-stake (PoS) consensus is the aspect of the upgrade which has become most time consuming. Buterin said that initially, Ethereum’s development team predicted this process would only take a year. As in turns out, it’s more likely to take six years.

Ethereum’s other cofounder, Charles Hoskinson, who founded and now heads the Cardano network, said that most of the work involved in the upgrade would probably happen in 2022. Hoskinson believes the project will likely be completed in late 2022 or early 2023.

Ethereum’s change in consensus from PoW to PoS means that miners will now be required to have a financial stake in the blockchain in order to mine its tokens. This differs from PoW where powerful computers are required to solve complex mathematical problems. PoS consensus platforms are the future of blockchain as they’re considered much more environmentally friendly.

Costly Delays

Serenity’s delays are by no means harmless to Ethereum with the extended window of time allowing an opportunity for users to adopt alternative networks.

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Perhaps Ethereum’s most direct competitor is Cardano, whose founder – Charles Hoskinson – also cofounded Ethereum’s blockchain. In fact, Cardano’s main purpose is to address problems in Ethereum’s network, relating to scalability, costs and transaction speed.

Cardano, which was built on the back of academic, peer-reviewed research provides an very attractive alternative to Ethereum while it awaits its upgrade.

Only time will tell how much Ethereum’s upgrade delays will cost the platform.