4 Myths about Ethereum 2.0

Ethereum 2.0, a long-awaited upgrade to Ethereum, is planning to be launched this year. More than a simple update or hard fork, it is an entirely new blockchain which runs on a Proof-of-Stake system.  

There’s a lot of talk and speculation about Ethereum 2.0. In this post, we highlight 5 easily held misconceptions about this next stage of Ethereum.  

Myth #1 Ethereum 2.0 will be a simple speed upgrade for Ethereum. 

While Ethereum has experienced many hard-forks, Ethereum 2.0 will be a paradigm change. Most updates to Ethereum are non-contentious hard-forks. To the end user, these hard forks happen fairly seamlessly, similar to how a phone or laptop may automatically update its operating system. 

Ethereum 2.0 however is a structurally different version of Ethereum. It will use Proof-of-Stake consensus instead of the current Proof-of-Work. It will also use a completely different, sharded architecture to increase scalability.  

Because of these structural differences, Ethereum 2.0 will not be a straightforward hard-fork. Instead, it is being implemented as its own chain, but with plans to eventually migrate Ethereum 1.0 accounts and contracts over. 

The details of this migration are still being discussed, but the current plan is to migrate Ethereum 1.0 over to Ethereum 2.0 to exist on one of the 64 shard chains.  

Myth #2 Ethereum 2.0 is coming in one fell swoop 

To ease the transition to a new framework, Ethereum 2.0’s introduction will actually take a phased approach. The first phase, phase 0 is coming this year. It introduces the Beacon chain and staking, but does not implement more complicated smart contact functionality.  

Phase 1, the next stage of Ethereum 2.0, will introduce shard chains. Sharding is a structural innovation introduced in Ethereum 2.0 which promises to significantly improve scalability. It is inspired by database sharding. 

Phase 2 will be the final stage of the Ethereum 2.0 rollout. It will have account balances, transfer, and smart contact functionality.  

Each of these phases will take time to be implemented, and be thoroughly tested. While all signs point to Ethereum 2.0 phase 0 arriving this year, Phase 1 will most likely be arriving in 2021, with Phase 2 after that.  

Myth #3 Ethereum 2.0 will have its own token. 

Ethereum only has one native token - ETH. This is the native asset of Ethereum, and will also be the native asset of Ethereum 2.0.  

Phase 0 of Ethereum 2.0 will accept deposits for users who would like to run validators. Validators perform Proof-of-Stake consensus to secure the network. In return they earn ETH.  

It should be noted that Phase 0 will have very limited functionality, and since there is currently only planned to be a one-way bridge for ETH to migrate to Ethereum 2.0 Phase 0, ETH sent to Ethereum 2.0 phase 0 will essentially be locked and inaccessible for a significant period of time.

Myth #4 ETH 2 will still be organized around blocks  

ETH 2.0 will still have a blockchain, but it will actually be organized around slots and epochs.  A slot is currently specified to be 12 seconds long. Within each slot, a committee of validators attests to the validity of blocks. Attested blocks are included in that slot, though slots may also be empty. 

You can see this in action at https://beacon.etherscan.io/ 

Another important unit is the Epoch. An Epoch is a fixed number of slots(currently 32) after which validators are reshuffled in committees.   

Quantstamp is proud to be auditing the Prysmatic Labs Ethereum 2.0 client.