We’ve all heard about Ethereum’s capabilities, its market cap, and the blockchain’s potential. But the latest buzz is more about Ethereum moving to PoS, which although is not beneficial to the crypto miners but will supposedly help Dapp developers. Before we get into all that, let’s talk about Eth in brief.
Ethereum is a blockchain platform that performs on a decentralized network. The three concepts of Ethereum are smart contracts, decentralization, and privacy. It is the second-largest cryptocurrency by market capitalization and has launched an upgrade in the market.
This upgrade has made a large shift of the blockchain network as it has switched its system from PoW (Proof of Work) to Pos which is Proof of Stake to improve the flexibility and to bring new functions and attributes. This new upgrade of Ethereum is also known as “Serenity” which was first announced by the co-founder of Ethereum.
According to the original plan, there were about 4 phases of the upgrade. But the launch of upgrades has been delayed several times because of the changes in the framework. But, this new upgrade and move towards the PoS have introduced many benefits and features in the market. So, here in this article, we will mainly focus on the impact done on the Decentralized Applications (DApps).
Ethereum Pos and PoW
The decision taken by Ethereum to change its system from PoW to PoS has raised many debates and arguments. Proof of Work is the original system of blockchain, it needs miners to verify transactions and make fresh blocks with the help of computing power. Now, with the increase in competition, the difficulty of mining new Ethereum also increases. Furthermore, higher difficulty means more computing power which results in high consumption of energy and environmental concerns.
This concern of high consumption of energy is the reason behind the introduction of other mechanisms, and one of them is the PoS. This mechanism eliminates the requirement of computing power which saves energy and also replaces the miners with validators that verify transactions and make fresh blocks. With the move to PoS, the Ethereum holders will be able to take part directly and will receive advantages from maintaining the network by staking rather than assessing complex hardware and wasting electricity. The positive environmental impact of PoS will welcome improvement, this upgrade will bring multiple changes and several questions for the customers and developers.
The Impact on DApps with Ethereum moving to PoS.
Decentralized applications provide new possibilities for gaming and the construction of virtual worlds. By focusing on the complete Decentralized Applications ecosystem, information gathered from Dapp.com portrays that Ethereum is the dominant platform when it comes to regular trading volumes. Experts believe that Ethereum 2.0 is a major step for the developers in the Decentralized applications ecosystem, they say that users will not have to do anything new or extra with this upgrade, the flexibility that naturally comes with Ethereum 2.0 will allow the developers to construct more interesting and amazing Decentralized Applications. All the categories of DApps will gain an advantage from the Ethereum 2.0 update.
Transaction Speed will Increase
Any Decentralized Application that needs quicker transactions will gain great benefits, gaming will definitely be on the list. But the most amazing part is that the opportunity it will bring for the new kind of Decentralized applications that have not yet been seen on Ethereum but is present in the normal Web 2.0 World like the social DApps.
The other important change in Ethereum 2.0 brings is the elimination of the gas fee from the Ethereum network. This will boost the usage of Decentralized applications. Now, gas is the cost that the network burns as Ethereum itself to make a transaction on the Ethereum network. As this network got famous, there were times when the usage of the decentralized applications dropped, and the reason behind it was the increasing gas fee.
Experts have stated that the increase in gas prices normally lessens the activity of the user as it costs too much to get a transaction validated. This impacts various categories of DApps in different manners. For the games and other Decentralized applications, where the value of the transaction is much smaller but the gas price might be higher, there is literally no point in spending $6 on a $3 transaction. This is the reason why usage drops drastically. And, this update brings you the feature of no gas fee as it accesses a proof of stake mechanism.
All of this states that the Decentralized applications will be highly benefited from the flexibility and the new opportunities that will be introduced by Ethereum 2.0.
Frequently asked Questions
- What has changed with Ethereum 2.0? What do the improvements mean?
Ethereum 2.0 will bring an advantage to the scalability and the security of the Ethereum public network. This update will not remove any of the information, history, records of the transactions, or the ownerships of the assets in Ethereum 1.0.
- What is Ethereum 2.0?
Ethereum 2.0 which is also popular as “Serenity” is the upgrade of Ethereum 1.0. The upgrade is currently in process and it will complete in further phases in the Ethereum 2.0 transition timeline. With each phase, the functionality and the performance of Ethereum will improve in different ways.
- How is Ethereum 2.0 different from the older versions of Ethereum?
Until now, Ethereum has been using the proof of work mechanism. In Ethereum 2, the mechanism will move to a PoS proof of stake mechanism. This upgrade will eliminate the high consumption of energy. It will also increase the speed and the number of transactions per sec.
Ethereum 2 is a newer and much better version of Ethereum in multiple aspects. It is a major update and has introduced plenty of improvements in the network. It uses the PoS mechanism which advantages the decentralized applications in many ways too.
The high consumption of energy has been a huge problem, but this upgrade is the solution for this concern. Users will no more have to pay a high gas fee for transactions as this update has eliminated gas fees. All in all the introduction of this update will benefit all dapp developers in the future.