In order to be able to achieve consensus over the computational needs of the entire world, Ethereum needs to be much faster than what it is now. The “World Computer” needs to be Turing complete. Meaning it should be able to run an infinite number of applications. This is a very costly feat as computation under consensus is always going to be costlier than running consensus less computing.
The highly anticipated Ethereum 2.0, the Ethereum network’s transition from the existing Proof-of-Work consensus to Proof-of-Stake, is an extremely complex process and would take a long time to implement.
Currently, Ethereum is leveraging a Proof-of-Work (PoW) consensus mechanism. The network is run by high-powered servers, referred to as nodes, compete to solve extremely complex mathematical puzzles in order to validate transactions and approve new blocks.
Due to the difficulty involved in the process, the servers have a remarkably high rate of electricity consumption. Due to this, PoW has received a bad reputation for its negative effects on the environment.
While the Ethereum developers and a major part of the community think that the updated dubbed ‘Serenity’ won’t be here for another few years, ConsenSys Co-founder Andrew Keys and a managing partner at DARMA Capital visualizes something completely different.
According to a post published on the ConsenSys website, Keys discussed his predictions for 2020. Comparing the Ethereum network with the internet era of 1996, he said:
“Ethereum 2.0 will be the big red button that launches us off of dial-up and into broadband.”
He firmly believes that we are “rapidly” moving towards Ethereum 2.0 as the final hard fork of the Ethereum 1.0, Istanbul Hard Fork, has already been deployed successfully. The update delayed the difficulty bomb problem that was slowing the network. According to Keys, the update was “the cherry on top.”
“2020 will see Ethereum move stridently beyond Phase 0 of Ethereum 2.0, onto Phase 1 and the launch of shard chains,” the executive said.
Ethereum co-founder Vitalik Buterin had made a hard stand against the insinuation that Ethereum 2.0 was delayed. He came out and said:
“The team” is larger and broader than you think. While I get frustrated with the antics of the “chattering classes” myself, it’s important to keep in mind that Prismatic, lighthouse, the eth2 research team, etc etc are all continuing work right on schedule, and the recent governance noises, while loud and annoying, did not delay the progress of eth2 by even a single day.”
“With potentially many years before a full “Ethereum 2.0” roll-out, the current chain would need changes to ensure that larger problems that wouldn’t render Ethereum in-operable before a comprehensive protocol upgrade could be delivered.”
If Ethereum finally moves on to a fully PoS based system, the current inflation rate of 5% or more would also be eradicated. According to the developers, the new system would further stabilize the blockchain and reduce the annual inflation rate to just 0.22 %.
Right now it’s hard to figure out a timeline for ETH 2.0 launch, but Andrew keys say that the wait would be worth it.
“To daily observers, this upgrading process may seem long and winding, but the extra time it takes to develop the network properly will benefit the entirety of humanity.”