The Ethereum 2.0 upgrade release date draws closer, but when looking at Ethereum vs Ethereum 2.0, what’s the difference?
Ethereum is not alone in receiving a hefty update in the near future. Cardano will undergo its Alonzo upgrade next month, implementing smart contracts on the network. Bitcoin is set for its Taproot upgrade later this year, too.
Here’s a look at what Ethereum 2 means for ETH.
Ethereum vs Ethereum 2.0 Differences
One of the major talking points and differences between Ethereum and Ethereum 2.0 concerns Ethereum staking.
Ethereum 2.0 will see the Ethereum blockchain switch from a Proof-of-Work (PoW) algorithm to Proof-of-Stake (PoS). This will lead to the decline of Ethereum mining in favour of staking, deemed a less environmentally damaging method of validating transactions that will make the network nearly 100% efficient.
Another new aspect of ETH2 is sharding. The Ethereum network has grown exponentially in recent years, and to reduce pressure on the blockchain and nodes, Ethereum 2.0 will introduce 64 additional chains via sharding.
With 64 new chains – or shards – the Ethereum 2.0 upgrade will see Eth2 able to process thousands of transactions per second - much more than the current Ethereum network. It hopes this will add further security and scalability to the blockchain compared to the existing Ethereum chain.
Will Ethereum 2.0 Replace Ethereum?
The Ethereum 2.0 upgrade is not technically a replacement for Ethereum. Instead, it is best described as a merger.
In the Ethereum.org FAQs for Eth2, the site also states it is "not accurate to think of Eth2 as a separate blockchain."
The merge is the next step in Ethereum 2.0’s roadmap. This will see Ethereum 2.0’s Beacon Chain merge into the Ethereum mainnet, the current version of Ethereum.
Similarly, Ethereum 2.0 does not introduce a new cryptocurrency or coin that will replace your current Ether.