Ethereum has had a huge boom since it’s launched in 2015 and especially in 2021. We have seen insane network adoption, flourishing use cases like DEFI, NFTS, Gaming. EIP-1559 went live and now we are burning Ethereum. We have also seen large-scale layer 2 scaling solutions which are starting to get adoption very rapidly.
In this article we are going to talk about the latest highly anticipated event on the roadmap of Ethereum is the arrival of ETH 2.0, particularly the merge event where ethereum turn’s on proof of stake becomes a staking asset and eth becomes deflationary which is believed to happen in 2022!
When exactly is this going to happen? Is this gonna fix gas fees on ethereum? What will happen to my coins when this happens? These are questions that are frequently asked related to the arrival of Eth 2.0.
Hopefully, you will have a big picture view after going through this article.

WHAT IS ETHEREUM & 2.0?

 Firstly, what is ethereum? Ethereum is a decentralized, open-source blockchain cryptocurrency that enables the deployment of smart contracts and decentralized applications (dApps) to be built and run without any fraud, control, or a third party. 

So if you are using ethereum right now you have a meta mask wallet, you are buying NFT’s(Non-Fungible Tokens), you are trading at decentralized exchanges(DEX). You are using ethereum 1.0 !. 

We are in a multiphase rollout to ethereum 2.0 which is a long-term vision for ethereum and which always has been from day one. The whole idea of ethereum was to get it out there, get it working and change it to become ethereum 2.0 to realize its grand vision. This has taken years to achieve and we are about to cross a major milestone on this.

 

It is happening in multiple phases. We’ve had phase 0 which is creating the ETH 2.0 beacon chain. Ethereum 2.0 kind of exists right now in this thing called “Beacon chain“ which is a separate blockchain that is operating on the side with eth 1.0 which we are using today and that’s where proof of stake exists. You can go and stake eth right now and move it over to this beacon chain but you can’t take it back till this merge has happened. That’s the big milestone in the roadmap which will move us into phase 1 of this migration where we take this separate blockchain and merge it back into eth 1.0 and everybody using ethereum is now using proof of stake blockchain where you can easily stake eth on the network and each of the assets is gonna be deflationary by nature.

HOW IS IT DEVELOPED?

 Ethereum 2.0 is a decentralized effort. There is not a company that is sitting there and controlling all the actions and building ethereum and ship it out like a centralized software i.e. FACEBOOK, WHATSAPP, etc. It’s an open-source community that coordinates together to create this and whenever the blockchain is upgraded they publish this open-source software and the only way for the upgrade to be accepted is if the miners or validators download it and then make that transition to this new software. There are also incentives for people who run the network, not just those who created them. 

WHAT’S GONNA HAPPEN WHEN ETH2.0 is LIVE?

 The biggest benefit of this adaptation will be that staking will be live and you can stake eth natively on ETH 2.0 which is gonna be liquid (means you can withdraw, move it . which can’t be done right now ) and the other is that eth is gonna become a deflationary asset. When EIP-1559 was implemented in August 2021 eth was getting burned whenever there’s a transaction and right now we pay a gas fee to do that, so a part of that gas fee gets removed completely. It means that less eth is being produced by the blockchain it offsets the issuance but when you go and stimulate the merge of eth 2.0 you see that eth will be net deflationary after the eth 2.0 merge. 

Which is a huge thing for price appreciation of eth assuming the demand for eth continues that will introduce a part of economics which will just increase the price of ETH.

 

As we know that eth is a multiphase roll-out, so what’s the next major milestone for ETH ?. We know the long-term vision of ethereum is a roll-up centric feature with eth underneath the hood with the final eth2.0. The next phase after this is ‘SHARDING’. Sharding is breaking up the blockchain into multiple blockchains. This is necessary because there is a limitation to the ethereum scalability right now which is that every single node of the blockchain has to keep a copy of the transactions but with sharding, this responsibility gets broken down and divided into smaller groups. So a new transaction doesn’t have to make a round trip to the entire network and can live on shards. Which are all in consensus. 

This is a way way more complex phase that will need a whole article to cover. Stay tuned so you don’t miss any of the juicy stuff. 

FUN FACTS:

• You won’t get any new coins or drops on this upgrade.
• Your current tokens will be automatically converted when the merge happens no need to worry!