What is Ethereum 2.0

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The Ethereum 2.0 upgrade is the technology and changes over a multiple year time frame which will allow a safe and secure transition the world’s second-largest blockchain (by market capitalization) to proof of Stake from Proof of Work.

How does Proof of Work differ from Proof of Stake

Proof of stake (PoS) differs in that instead of miners, transaction validators stake crypto for the right to verify a transaction. These validators are selected to propose a block based on how much crypto they hold, and how long they’ve held it for. Source

Other validators can then attest that they have seen a block. When there are enough attestations, a block can be added to the blockchain. Validators then are rewarded for the successful block proposition. This process is known as “forging” or “minting”.

The main advantage of PoS is that it is far more energy-efficient than PoW, as it decouples energy-intensive computer processing from the consensus algorithm. It also means that you don’t need a lot of computing power to secure the blockchain.

Eth2 refers to a set of interconnected upgrade.

The purpose of these upgrades is to make Ethereum more scalable, more secure, and more sustainable. These upgrades are being built by multiple teams from across the Ethereum ecosystem. Source

What effect will it have on applications or dApps already on Ethereum?

Ethereum 2.0 is expected to have little to no impact on users and decentralized applications (dapps) currently operating on Ethereum. But the upgrade to radically improve network performance and security. Source: Ethereum developer Danny Ryan Link

Goals

Better Scaleability

Ethereum needs to support 1000s of transactions per second, to make applications faster and cheaper to use.
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Better Security

Ethereum needs to be more secure. As the adoption of Ethereum grows, the protocol needs to become more secure against all forms of attack. Source The validators add to the security of Ethereum. Because the requirement in ETH to be a validator is small, it is anticipated that there will be many validators. This large number means it will be hard for any one to get enough control over enough of the validators to approve false information on the Blocks recording the real transactions. In theory it takes control of 51% of the validators to control and corrupt the systenm by recording false transactions that benefit someone unfairly, such as recording the trnasfer of one million Ethereum to someone's wallet, so they can theen sell them for a great deal of money. Source

Better for the envirnment

Ethereum needs to be better for the environment. The technology today requires too much computing power and energy. Ethereum 2.0 will use validators and not miners. Validators don’t need energy-intensive computers in order to participate in a proof-of-stake system – just a laptop or smart phone. This will make Ethereum better for the environment. Source

How to accomplish these goals

The Beacon Chain

Staking will begin on this chain, which eventually merge with the current chain which is the Mainer. This will coordinate the new system, bring staking to Ethereum and lay the groundwork for future upgrades. Source

Shard Chain

Shard chains will expand Ethereum's capacity to process transactions and store data. Sharding is the process of splitting a database horizontally to spread the load. The use of shard chains means that validators only need to store/run data for the shard they're validating, and not the entire network. This speeds things up and drastically reduces hardware requirements. In an Ethereum context, sharding will reduce network congestion and increase transactions per second by creating new chains, known as “shards”. Sharding is also a good way to scale if you goal is decentralization. This method reduces the hardware requirements, which increases the number of people who can be validators. This therefore increases decentralization. The alternative is to have validators run the entire blcokchain record while validationg every transaction. This would require increasingly powerful and expensive computers as the database of all historical transactions grew in size. This limits the number of validators and leads to more centralization and a more vulnerable network. A distributive network is one of the key ways a blcokchain provides security by elminating a single or finite number of computers to attack or control.
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The Docking

Mainnet Ethereum will need to “dock” or “merge” with the Beacon Chain at some point. This will enable staking for the entire network and signal the end of energy-intensive mining. Source

Staking

The Beacon Chain will bring staking to Ethereum.

So if you have ETH, you can help secure the network and earn more ETH at the same time. Source

Becoming a Validator by Staking.

Staking is the act of depositing 32ETH to activate validator software. As a validator you’ll be responsible for storing data, processing transactions, and adding new blocks to the blockchain. This will keep Ethereum secure for everyone and earn you new ETH in the process. This process, known as proof-of-stake, is being introduced by the the Beacon Chain. Source

Rewards for being a Validator

Ethereum

Ethereum rewards are earned for work that helps the network reach consensus.This work includes batching transactions into a new block or checking the work of other validators, which also helps keep the chain running securely. Source

Requirements to be a Validator

Ethereum

You'll need 32 Ethereum to become a full validator or some ETH to join a staking pool.

Computer capable of running the software called Mainet.

Your computer needs to operate or "run" an 'Eth1' or mainnet client. Alternatively, you can use a backend API. Source

Risks of being a Validator

Although you can earn rewards for doing work that benefits the network, you can lose ETH for malicious actions, going offline, and failing to validate.

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If you try to cheat you lose your Ethereum

Because you have to stake your ETH in order to validate transactions and create new blocks, you can lose it if you decide to try and cheat the system.

Join the Ethereum Validator/Staker Community

The r / ethstaker is a community is for everyone to discuss staking on Ethereum.

Its purpose is to provide advice, support, and a place to discus various things related to staking. This is the link for r/ethstaker Source

Summary

Ethereum is the third oldest blockchain in modern history with Bitcoin and Litecoin being 1st and 2nd, respectively. Ethereum has firmly established itself as the preminent place to conduct decentralized finance with over 200 dApps or decentralized applications on its blockchain and over 12.2 Billion dollars in DeFi alone. The transition to Proof of Stake will be difficult, but Ethereum will emerge much stronger as a POS chain. I suggest you do your own research into this very popular blockchain.

Written by @shortsegments