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Ethereum 2.0 (Serenity)

When asked about the future of Ethereum in 2019, co-founder Vitalik Buterin stated, “scalability is a big bottleneck because the Ethereum blockchain is almost full. If you’re a bigger organization, the calculus is that if we join, it will not only be more full but we will be competing with everyone for transaction space. It’s already expensive and it will be even five times more expensive because of us. There is pressure keeping people from joining.”

To improve the scalability issue, Buterin believed that networks needed to evolve away from the idea that every computer is required to verify every transaction (proof of work) and towards networks where every computer on average verifies only a small portion of transactions (proof of stake).

In order to resolve these key issues around scalability and performance, Ethereum developers have introduced on Github what is sometimes known as Ethereum 2.0. Rather than trying to build these upgrades directly onto the main blockchain and causing a hard fork, Ethereum 2.0 was designed to build out a separate platform from the main chain that eventually replaced the old chain. Over time all decentralized application (DApps) on the legacy Ethereum blockchain would be expected to migrate to the new chain.

The upgrade to Ethereum 2.0 was meant to help Ethereum scale, and had two major goals:

  1. Introduce a proof-of-stake consensus mechanism, which eliminated the need for expensive proof-of-work mining.
  2. Introduce sharding, which improved the speed and throughput of ETH transactions.
Note: These are non-technical definitions meant for a general audience and should not be used as legal definition
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