At the ETH Shanghai Web 3.0 Developer Summit in May, Ethereum co-founder Vitalik Buterin said that this summer, Ethereum will complete the transition from the Proof-of-Work (PoW) to the Proof-of-Stake (PoS) consensus mechanism. Basically, it’s a new way to approve transactions within the network, presumably faster and more energy-efficient.
According to Buterin, the merger will happen in August if there are no problems. Otherwise, it will occur in September or October. Eventually, the current Ethereum core network will “merge” with the PoS. This will be the end of using PoW in Ethereum. This is what Ethereum 2.0 is all about.
But during the Dcentral Austin event, Charles Hoskinson, co-founder of the Cardano blockchain platform and former Ethereum co-founder, said that Ethereum 2.0 will not be fully launched until 2023, most likely 2024. Hoskinson added that what you can call Ethereum 1.5 already exists and is called Polkadot (a segmented protocol that allows blockchain networks to work together seamlessly).
Hoskinson served as executive director of Ethereum. Buterin fired him in 2014, as he believed the project was supposed to be non-commercial, while Hopkinson was of a different opinion.
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Why is Ethereum 2.0 so important?
The current Ethereum protocol causes high demand to increase transaction fees, which is unprofitable for the average user. The disk space required to run an Ethereum client is growing rapidly. And the underlying Proof-of-Work consensus algorithm, which secures and decentralizes Ethereum, has a significant impact on the environment.
Bitcoin mining consumes approximately 127 TWh of electricity at an annualized rate. This is more than the energy consumption of all of Norway.
ETH consumes about the same amount of energy as Finland and leaves the same carbon footprint as Switzerland. According to Forbes, the merger is expected to reduce Ethereum’s carbon footprint by 99.95%.
As of April 2022, Ethereum uses two parallel blockchains, one of which operates on PoW, and the other, the test chain, runs on PoS. The merger will combine the legacy Ethereum Mainnet blockchain (ETH1) and the new Beacon Chain (ETH2) into one unified blockchain.
Ethereum’s developers have already dropped the terminology of ETH1 and ETH2 because of concerns that it might confuse users before the merger.
Bitcoin and Ethereum are the two most popular cryptocurrencies, together accounting for 63.6% of the global cryptocurrency market capitalization.