The Ethereum network has finally launched a scalability and security update. The trial version of the highly anticipated Ethereum 2.0 project went live on December 1st at noon UTC with a presentation of the Beacon chain genesis block. CEX.IO supports the Ethereum upgrade and prepares to take all necessary steps to update our systems.
ℹ️ About Ethereum 2.0 and Beacon Chain
Ethereum 2.0, also known as “Serenity”, is an upgrade to the Ethereum blockchain. It aims to improve the speed, efficiency and scalability of the network. In fact, Ethereum 2.0 will be an entirely new blockchain supported by a proof-of-proportion mechanism. However, these complex changes are implemented at different intervals over a long period.
The first one, called Phase 0, was launched on December 1, 2020, with the introduction of the beacon chain. According to the team behind Ethereum, the Beacon Chain will deliver Proof-of-Stake (PoS) consensus to the Ethereum blockchain to address some of the scalability issues. Bright chain should further become the new Ethereum. Currently, it does not yet support smart contracts, sharpening, or a new virtual machine. The current version of Ethereum 2.0 is for testing staking features only.
🤔 The main difference between Ethereum and Ethereum 2.0
Previously, all transactions in the Ethereum blockchain were validated through the Proof of Work (PoW) mechanism. At PoW, miners use the computer processing power to solve complex math algorithms and add new transactions in blocks.
Ethereum 2.0 will use PoS consensus, where validators can simply contribute crypto for the right to verify a transaction. Therefore, the new project is considered more energy efficient as it does not require computing power to process it.
🙌 What does it mean for consumers?
The original Ethereum chain will run in parallel until the complete transition to a new blockchain. There is no need to move your ETH funds to another blockchain, the mainnet is fully functional and usually processes transactions. The migration to the network will be automatically updated and no additional user steps are required. As the original chain runs in parallel, there will be no interruption in data processing or transactions.
Upon completion of the Beacon chain testing, you will be able to support the network processes by participating in staking. On top of that, you can receive crypto rewards for that. Currently, the stacked tokens remain locked on the beacon chain until launch in 2021. As the complex upgrade is phased in, the Ethereum mainnet will become Official to the later Test-Stake model.
Interestingly, according to Glassnode, nearly 900,000 Ethereum have been stacked so far, which far exceeds the minimum required for Step 0. This shows strong community support for Ethereum 2.0.
🔥 CEX.IO will support ETH 2.0 sticking
CEX.IO plans to support the Ethereum network upgrade.
Our engineers are closely following the ETH2 project, which is currently in a testing phase. With the safety of your ETH in mind, we also want to provide more opportunities for you to look. Therefore, the CEX.IO team is looking into the possibility of launching ETH2 staking. We will share more details in a separate publication. Stay tuned for updates!
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Note: Staking Ethereum 2.0 will be available to customers in eligible jurisdictions.