Giant step on the way to Ethereum 2.0: October upgrade brings proof of stake
Ethereum is making headway. The upgrade called Altair, which is scheduled for the end of October, is intended to introduce the new consensus model Proof-of-Stake. This brings Ethereum 2.0 within reach.
The block for the implementation of the upcoming Altair upgrade is not yet known, but the era in which it will be. That is expected to be reached on October 27th. Then the first mainnet upgrade of the beacon chain, which is considered a core component of Ethereum 2.0, will go live.
With Altair, Ethereum is switching from the computationally intensive proof-of-work to the leaner and far less resource-hungry proof-of-stake. This fundamentally changes the processes on the blockchain. Instead of miners, validators will confirm the transactions in the future.
Danny Ryan from the Ethereum Foundation provides more background in a blog post to announce the upgrade. Future validators are requested to update their nodes as early as the beginning of October. The Ethereum Foundation promises to communicate further technical details in a further post, which is to appear on October 4th.
The pure changeover to proof-of-stake may be recognized as a significant step forward, but it does not yet mean Ethereum 2.0. Much has already been achieved with staking and the beacon chain, but the introduction of so-called shard chains will have an even clearer effect.
This is a concept in which not every transaction involves the entire blockchain, but only individual “shards”, i.e. fractions of the chain. In this way, significantly more transactions can be processed at the same time, which makes the capacity of the Ethereum network almost freely scalable. The introduction of this module is unlikely to be expected before mid-2022.
However, investors are currently not honoring the rapid technical progress. The ether moves up and down in a zigzag motion, trading around $ 2,970 at the time of this post’s release, according to Coinmarketcap. This is a long way from its high of $ 4,362, which it hit in May. Even the interim high of $ 4,022, touched briefly at the beginning of September, does not seem attainable at the moment.
Anyone who is happy about the rapid progress at Ethereum should take into account that the upcoming Altair upgrade actually only affects the beacon chain. The parallel Ethereum blockchain, which is currently running live with all transactions, is not affected by the switch. She will continue to work with the proof-of-work consensus model.
The Altair update is intended to prepare the beacon chain for the so-called merge. This is the merging of the previous Ethereum blockchain, referred to in this context as the execution layer, with the new beacon chain, which is also referred to as the consensus layer. Only when this merge has been completed has Ethereum switched to proof-of-stake in real-time operation. This merger is expected in mid-2022.
