Mining in the current system will be replaced by Staking, and with Ethereum 2.0 fully active, miners will no longer have a function. By locking down Ethereums in their wallets, users will be able to participate in the “Proof of Stake” settlement and earn passive income.
Stage 0 – Beacon Chain
The first phase, which we can translate as the Flare Chain, will host the “Casper Proof of Stake” protocol. This protocol, which will change the mining method on the Ethereum network, will also provide the transition to the data transport method called “Sharding”. This method, which facilitates the transfer of data by dividing it into parts, will also allow the Ethereum network to scale faster.
The most important point of interest to users in phase 0 will be the simultaneous operation of 2 different Ethereum blockchains. The currently used Ethereum 1 blockchain will run simultaneously with the Ethereum 2.0 blockchain. At this stage, users will be able to start Proof of Stake mining. Users who want to generate income with the Casper Proof of Stake protocol will need to transfer at least 32 Ethereum from the existing chain to the Ethereum 2.0 chain. However, they will not be able to transfer from the Ethereum 2.0 chain to the existing chain until they move to Phase 1.
Stage 1 – Shard Chains
Sharding, which makes it easier to move and process data by dividing it into parts, is a method also used in classical databases. Shard Chains, which allow a large number of transactions to be performed at the same time, are seen as an important stage of scaling in Ethereum 2.0.
In Phase 1, it is aimed to create 64 Split Chains. At this stage, which will be a test phase for Partitioned Chains, the establishment of the partitioning structure, the validity of the data and the operation of the Split Chains between each other will be tested.
As the testing process will continue at this stage, the existing Ethereum blockchain and Ethereum 2.0 blockchain will continue to work in parallel. The amount of Ethereum produced (issued) can be expected to be higher than normal during this process, as the Validators mining Proof-of-Stake will also generate Ethereum revenue. However, production inflation is expected to stabilize as Phase 1 will also reduce Ethereum production with Proof-of-Work mining (PoW).
With the activation of Sharding, there will be serious decreases in network usage and transfer costs. In this way, it will be possible to produce and transfer smart contracts (tokens / tokens) on the Ethereum or Ethereum blockchain at much lower costs.
Stage 2 – State Execution
Phase 2, which is perhaps the most critical phase of the Ethereum 2.0 process, can be considered as Implementation Initiation. Functions that were tested separately in the previous stages will be brought together at this stage. Split Chains will move from simple transaction structure to regular transaction structure and smart contracts will be renewed to work with this structure.
This phase will be an important one especially for decentralized applications (dApps). In order for their apps to work with Split Chains, decentralized app developers will need to choose the partitions they want to work on and make their apps suitable for running on Split Chains.
All these stages plan the development and change processes to be carried out to enable the transition to Ethereum 2.0. However, it remains unclear when and how the current blockchain, wallets and smart contracts will migrate to Ethereum 2.0. Considering the delays experienced in the previous update processes, there may be possible delays in the Ethereum 2.0 transition. If you are not a developer, you must wait for all the steps to be completed to move your Ethereum assets from the existing blockchain to the Ethereum 2.0 blockchain.
Medalla, the official final testnet of Ethereum 2.0, started working with 20,000 participants from all over the world as of August 4, 2020. This testnet will be the final testnet before “Ethereum 2.0 Phase 0”.
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