Ethereum, the second largest cryptocurrency by market capitalisation and a very popular name, has always been plagued with scalability issues, making it less optimal than desired for adopters. This may have been one of the reasons why, one of the “Big Four” accounting organisations, Deloitte, decided to migrate their clients’ data from the Ethereum blockchain onto VeChain.
Ethereum popularised the smart-contracts concept. Nonetheless, it used the consensus mechanism employed by Bitcoin to verify transactions, the Proof-of-Work model. The latter is highly secure but inefficient in terms of energy consumption and throughput. As a blockchain, that should be able to process a large number of transactions per second, to fulfil its use-case, Ethereum needs to move to a Proof-of-Stake consensus mechanism, which will occur with the upgrade.
Multiple upgrades will be introduced to Ethereum in the “Ethereum v2.0 Serenity Upgrade”. The first being the implementation of Casper, Ethereum’s Proof-of-Stake consensus mechanism. Sharding will also be implemented, allowing a higher throughput by dividing validation tasks into smaller chunks. Although Ethereum v2.0 will not be fully completed for 2-3 years, the genesis block of ETH v2.0 may launch on January 3rd, 2020. Phase 0, which will be called the Beacon Chain, will use ETH v2.0 as a staking asset. ETH v1.0 tokens will be converted to ETH v2.0 through a registration contract (each time this is done, the ETH v1.0 token(s) claimed will be burnt).
As we have seen with the impending Litecoin halving, prices are often subjected to speculative surges before major events. Ethereum’s v2.0 upgrade, which looks to address one of its key flaws may well have the same positive impact on its price.
In the past years, we have seen significant institutional backing of Ethereum thanks to the Ethereum Enterprise Alliance (EEA) initiative. However, once this upgrade is completed, it will take Ethereum’s functionality and efficiency to new levels and may ignite global adoption.
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