Goodbye, Ethereum 2.0, we barely knew you

Goodbye, Ethereum 2.0, we barely knew you

Stop the presses! the Ethereum (ETH -1.69% ) The long-awaited upgrade to the cryptocurrency platform is no longer known as Ethereum 2.0!

All right, you can take a deep breath now. Technology updates are still ongoing and Ethereum will soon lose the stigma of being slow and expensive to maintain and operate. It’s just that the Ethereum 2.0 rebranding effort is over.

Image source: Getty Images.

What’s in a name?

Ethereum protocol developers began moving away from the Ethereum 2.0 name and abbreviations such as Eth1 or Eth2 in August 2021. The legacy code branch was officially renamed to “runtime”, while the new Eth2 protocol was moved into a file called “consensus”. “These names more accurately reflect what each code collection actually does, as the Ethereum 2.0 update aims to revamp the transaction consensus mechanism without affecting how Ethereum runs its smart contracts and decentralized applications (dApps).

So now the Ethereum community has rolled out the same terminology updates to the web portal, where coders and enthusiasts gather to discuss the future direction of the project. It’s as close to an official name change as you’ll get in a global project where policy decisions are made by popular vote among a wide range of stakeholders.

Thus, the old Eth1 codebase is now officially known as the execution layer of Ethereum. Eth2 is now the consensus layer of the same system. The two layers are expected to merge in 2022, simplifying the whole system to become Ethereum again, but with a plethora of significant upgrades. There won’t be a new token for the system formerly known as Ethereum 2.0, and Ether holders won’t have to do anything different. Upgrades should be seamless to most Ether owners unless you want to participate in the new staking process.

What we call the Consensus Layer by any other name would smell just as good

As a reminder, here is what the technology now known as the Ethereum Consensus Layer actually does.

First, the project added a new blockchain ledger known as Beacon Chain. It is the backbone of the new consensus system, where new development takes place and where new features first appear. At launch, Beacon gave the Ethereum community access to a proof-of-stake consensus system on top of the older proof-of-work platform. Ethereum holders can now stake their ether tokens in order to participate in the transaction consensus process – and earn dividend-like rewards in return.

The upcoming merger will shut down Ethereum’s inefficient and power-hungry proof-of-work system, replacing it entirely with the new Beacon Chain. Purchase Nvidia (NVDA -2.46% ) and Advanced micro-systems (AMD -2.04% ) graphics cards for the purpose of mining ether tokens will no longer be a thing, sending mining enthusiasts to other proof-of-work cryptocurrencies and reducing demand for high-end graphics cards. AMD and Nvidia seem to be underestimating the volume of business they are getting from Ethereum mining operations. The proof will be in the pudding when the mining option disappears and leaves these cards on store shelves, where gamers and media professionals can find them.

Finally, in 2023, the revamped Ethereum system – no longer split into separate consensus and execution networks, but folded into a single cohesive system – will once again launch shard chains on top of the proof-of-stake platform. from the Beacon chain. Sharding will increase the number of available consensus chains by 64 times initially and even more thereafter, massively amplifying the processing speed and flexibility of Ethereum.

A laptop user holding a large bouquet of cream colored roses.

Image source: Getty Images.

This is the part where the new version of Ethereum becomes a true competitor to today’s fastest smart contract platform. the gimbal (ADA 0.09% ), avalanche ( AVAX -4.65% )and Solana ( GROUND -2.84% ) developer communities aren’t sitting on their hands either, of course. But Ethereum’s back-end upgrades ensure that this network and its tokens remain relevant in a rapidly changing cryptocurrency market. The so-called Ethereum killers are just lighting a fire under the people of Ethereum to keep the good fight going.

All of these upgrades are still in the cards for Ethereum. It is no longer necessary to think of it as Ethereum 2.0. We have twin systems under the Execution and Consensus brands for now, and the whole shebang will soon be known as Ethereum again.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a high-end advice service Motley Fool. We are heterogeneous! Challenging an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and wealthier.