Ethereum is one of the widely used blockchains; with the inception of smart contracts on the Ethereum blockchain, the scalability issue pops up, which started to cripple the growth of decentralized application (dapps) on the Ethereum platform. As of April 2019, there are more than 250 dapps that are running on Ethereum platform. By early 2014, Vitalik Buterin, co-founder of Ethereum, started a discussion on moving Ethereum consensus protocol from Proof of Work (POW) to Proof of Stake (POS). Looking at security and impact on dapps, that was a very bold decision taken by him and the core team of Ethereum. It was almost impossible to consider decentralization, scalability, and consistency simultaneously. Then ETH2.0, Serenity born with sharding, beacon chain, including layer 2 solutions.
By the time ETH2.0, Serenity born, dapps, contracts, and ethereum nodes were grown exponentially. Implementation of ETH2.0 can not be done overnight with just plug and play. A comprehensive road map was built to overhaul the Ethereum network. According to ETH2.0 road map, it will take years of hardwork and enormous testing to fully convert the POW to POS. ETH will go into various hard forks to reach its final destination, nevertheless, upon completion, Ethereum will lead the market with throughput of more than 1000 transactions per second. The first glance of ETH2.0 looks very good, but there are various aspects that everyone should know.
Before diving deep, let us understand what ETH2.0 looks like:
ETH2.0, Serenity will introduce Beacon chain, Sharding, and Layer 2 scaling with Plasma, ZK-Stark, state channels, and moving from EVM to EWASH.
The Beacon Chain will manage the Casper Proof of Stake protocol for itself and all of the shard chains. Primarily Beacon Chain will be used for attestation of shard blocks without loading the data from shard blocks.
Sharding is the partitioning of large chains (databases) into smaller, faster ones hence making the entire system more scalable.
Plasma is a layer-2 scaling solution that enables fast and cheap transactions by offloading these transactions from the main Ethereum blockchain into a “side” chain.
ZK-STARKs (Zero-Knowledge Scalable Transparent ARguments of Knowledge) is a type of cryptographic proof technology that enables users to share validated data or perform computations with a third party without the data or computation being revealed to the third-party, also known as a zero-knowledge proof.
WASM is an open standard (backed by Google, Microsoft, Apple) and because of this it will allow more programming languages (C/C++, JS, Go) to be used for smart contract development (Solidity included).
The above functionalities look awesome to hear, but what is the impact on migration of old dapps, transactions between the different shards. As an independent stakeholder of the community, you should know these elements of ETH2.0.
According to Ethereum road map, a dapp can only be migrated to one shard, in ETH1.0, dapps applications can freely communicate in ethereum blockchain, by introducing sharding, there will be a big impact on the atomicity of transaction and dapps running on the different shards. Moreover, when ETH2.0 says transaction per sec (TPS) on ethereum blockchain will be 1000, but moving a transaction on different shards from customer A to customer B and then to customer C will take approximately 6 minutes. Beacon chain can give the receipt of fund tranasfer from customer A to customer B, however, customer B can not transfer it further until encumberment on customer A clears.
Moreover, going forward, smart contracts and dapps owners have to pay for using the storage. One way it is good to remove the dormant application, on the other side, ethereum becomes costly to use.
Changes in technology are inevitable, by doing proper analysis, creating project plan, and proper communication, it is easier to achieve the desired goal. Ethereum community is very confident on ETH2.0, nevertheless, there are some tradeoffs which community has to accept, which are tiny as compared to other objectives.