What is Ethereum & Ethereum 2.0?

Ethereum makes it possible for almost anyone to develop and use smart contracts, which are applications that run on the blockchain.

What is Ethereum?

“Ethereum is a technology that's home to digital money, global payments, and applications. The community has built a booming digital economy, bold new ways for creators to earn online, and so much more. It's open to everyone, wherever you are in the world – all you need is the internet.”

That is the exact Ethereum definition which is written on Ethereum's official website.

The ethereum network provides open access to finance and products for everyone -- no matter their background or location.

The ethereum software has enabled thousands of businesses and communities to create innovative applications – by enabling them to build their own programs on the foundation of the world’s first blockchain technology platform.

What is Ethereum 2.0 (ETH 2)?

Eth2 is a set of interconnected upgrades intended to improve Ethereum’s scalability, security, and sustainability. These upgrades are being built by multiple teams across the Ethereum ecosystem.

Why is ETH 2 Needed?

The Eth2 upgrades will help scale Ethereum so that it continues to provide a robust platform for decentralized applications.

One of Ethereum's most pressing problems is the need for greater transaction capacity.

Ethereum (the application) needs to be able to handle more than 15-45 transactions per second. The Eth2 upgrades will do that as well as some other changes.

The popularity of the Ethereum blockchain is creating high demand for Ether, making it more expensive to use.

Nodes are struggling to deal with the size of the Ethereum and the amount of data they need to process. And the underlying algorithm that keeps Ethereum secure and decentralized requires a lot of energy and is not very green.

A lot of what's changing has always been on Ethereum's roadmap, but the recent surge in popularity has increased the urgency to upgrade.

Differences Between Ethereum 1.0 and Ethereum 2.0?

New Ethereum 2.0 introduces a new consensus mechanism which is less wasteful of computing resources than the one currently in use on Ethereum 1.0.

Ethereum 1.0 limits the number of transactions the network can process to about 30 per second, creating delays and congestion.

Ethereum 2.0 will introduce sharding to increase the number of transactions that the network can process to over 100,000 per second.

After Ethereum 2.0, the cost to process transactions dropped because there was no hardware power required to process the transaction. Ethereum 2.0 introduced a base fee along with the gas fee to avoid malicious activities on the network.