ETH 2.0 Serenity
Ethereum(ETH 2.0) is the second largest cryptocurrency or blockchain to date, surpassed only by bitcoin. Even then, it has still been plagued with scalability issues for years, managing only 15 transactions per second. This and other issues are now coming to a close, well over the next 4 years, if all goes to plan. Ethereum will be undergoing, arguably it’s largest facelift since inception. Serenity will impact all layers of the blockchain, revamping the network to deal with scalability, security and interoperability.
What does Ethereum 2.0 Consist ETH 2.0?
The concept of this upgrade was presented in 2018 by Vitalik Buterin, but was officially announced with a roadmap by ConsenSys in May 2019. It consists of a number of smaller upgrades to be actioned over a 3 year period, resulting in a completely new architecture.
Ethereum 2.0 overall architecture. Original diagram by Hsiao-Wei Wang.
The architecture will be broken up into 4 main ETH 2.0 components:
PoW Main Chain: This is the existing Ethereum blockchain as we know it. It will remain in use as it is.
Beacon Chain: This chain is currently under development and will be the first new component in Ethereum 2.0. This is the coordination layer and will employ the Casper Consensus (PoS). Currently the Consensus Protocol uses ‘miners’. Under Casper, these will be replaced with Validators. Any Validator must commit some ‘skin in the game’ by depositing a fixed amount of ETH into the Validator Main Contract (VMC). This contract will be stored on the main chain and is regularly checked by the Beacon chain to add any new validators. Validators will perform in random groups and will be assigned to specific shards. In addition, each group will be reshuffled regularly to ensure collusion risks are minimized, such as 51% attacks.
Shard Chains: This is the next component to be released after the Beacon Chain. This is the specific component which deals with the scalability issues. Each shard will execute Smart Contracts and store their data. Basically, each shard will perform similar to a side chain structure. Initially these shards will not execute transactions until the infrastructure and security have been tested and confirmed. All ethereum addresses, account balances and smart contract data will be divided among these shards. When a transaction is sent to the network it will be placed into the shard which holds the address that signed the transaction. It will then be executed and the validators assigned to that shard will then include it in the next block. As a result, not all validators will need to confirm the transaction resulting in a greatly increased confirmation speed.
Prior to the launch of Serenity, ethereum must first complete the last of a series of hard forks. Since 2015, we have seen a number of upgrades — Frontier (2015), Homestead (2016), Byzantium (2017), and Constantinople (2019). The final fork, Istanbul, is planned for October 2019
This hard fork is scheduled for October 2019 and currently consists of 30 proposed EIPS, including the controversial and well known EIP 1057 [ProgPoW]. This EIP has been a hot topic in Ethereum communities and has received much debate. It is essentially designed to remove the advantage that ASICs have over other mining hardware. ASICs are Application Specific Integrated Circuits, and are normally designed to work with only one hashing algorithm.
There are two main problems with these, firstly that they are inefficient long term since they cannot be used on any other algorithm and can easily become obsolete if a hash is changed, such as what is planned for Ethereum. The second issue is that they are fairly costly and sometimes difficult to obtain resulting in a more centralized network than desired.
ProgPoW will still allow ASICs to be used, but will remove the advantage they have in performance, resulting them to be less cost-effective than general purpose GPUs.