(This is Part 2 of a 3-part series. Click here to view Part 1 if you missed it.)
The Beacon Chain, which is the first addition to the Ethereum 2.0 ecosystem, was launched on December 1, 2020. It not only brings staking to the cryptocurrency but also provides the groundwork for upgrades going forward.
Within a few days of the Beacon Chain launch, the participation rate had exceeded 98% on average. This rate demonstrates that active validators are doing a great job maintaining their online presence, validating blockchain transactions and carrying out their attestation duties.
More Scalable, More Secure, and More Sustainable
To support thousands of transactions per second, Ethereum needs to be more scalable. Its progress reflects this aim. It has become more secure against attacks as its adoption has grown. It is also becoming more sustainable. In the past, its technology required too much energy and computing power.
Perhaps the biggest improvement, however, involves the use of a technology called BLS signature aggregation. In essence, this development has made it possible to involve a higher number of blockchain validators in the consensus protocol. Thanks to BLS aggregation, hundreds of thousands of validators can participate, process transaction validations on the blockchain and improve network security.
Proof of Stake (PoS) vs. Proof of Work (PoW)
As mentioned previously, Ethereum is currently based on the PoW consensus. Ethereum 2.0 developers are working on prototypes and specifications to “hot-swap” this consensus for PoS. This swap is occasionally referred to as phase 1.5. A functional test net for the switch is anticipated in the immediate future.
Developers and engineers want to use sophisticated data to enhance the ecosystem’s role. The goal is to enable an incredibly high volume of data and to enhance other apps.
Ethereum’s transition to PoS provides solid security while permitting more limited issuance of new supply, since unlike META 1 Coin which has a fixed supply of coins, Ethereum is not capped. This is far from all it does, however. It also provides consistency in block time. In PoW, you have a process where very short and very long block times alternate.
Security is an important consideration regarding the potential of a blockchain reorganization attack. This occurs when miners collaborate to remove previously confirmed blocks from the blockchain. The likelihood of a chain reorganizing in PoW is inversely proportional to the depth of the block in the chain – the deeper the chain and larger the community, the harder it is for a reorg to succeed.
However, Ethereum Classic suffered multiple attacks earlier in its existence despite relying on the probabilistic finality of PoW. However, the concept of economic finality is critical in PoS, and ensures no reversion will occur in blockchain data. Security against these types of attacks is even more ironclad in Delegated Proof of Stake (DPoS) platforms, like META 1.
(This is Part 2 of a 3-part series.)