ETH 2.0 is an upgrade of the entire Ethereum network

29 Oct 2020

I. Market Context

The year 2020 is an interesting year for the Crypto market since DeFi has become a force that cannot be underestimated. However, DeFi still has many problems mainly because it is built on the foundation of ETH, which is relatively old. And good news for DeFi, by the end of 2020, ETH 2.0 will replace its old version and start to operate. However, many people are still not aware of the concept of ETH 2.0 as well as the progress of this largest upgrade ever.

In today’s article, we will cover everything you need to know about ETH 2.0.

II. What is ETH 2.0? Why do we need it?

1. What is ETH 2.0?

ETH 2.0 is an upgrade of the entire Ethereum Blockchain network. It can be roughly understood that ETH 2.0 will bring the changes in four basic issues:

2. Why do we need ETH 2.0?

There are many reasons that force ETH to launch ETH 2.0 in the time ahead. The main reason comes from the “backwardness” of the current ETH.

Firstly, ETH 1.0 has very slow transaction speed. The processing speed of ETH 1.0 is only 7 to 15 transactions per second, which is far behind compared to the 3.0 generation Blockchain like TRX or EOS, not to mention Blockchain in 2019 like SOL. Without upgrading and improving, ETH will gradually become obsolete.

Secondly, ETH is still using PoW. This consensus algorithm makes it very difficult for ETH to balance between scalability and security. PoW is also closely related to price. If the price isn’t high enough, PoW will make 51% attacks extremely easy. ETH is a typical example of this.

Therefore, ETH 2.0 needs to be launched as soon as possible.