What does the new Ethereum 2.0 mean for the future of ETH?

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Ethereum is the King of DeFi but Ethereum 2.0 can do even more. without a doubt, the growth of DeFi popularity has also had negative consequences on Ethereum 1.0. 99% of ETH transactions are a part of DeFi.

Ethereum is popular because of its DeFi smart contracts. Smart contracts occur via blockchain code and are essentially a contract for tasks to occur. Smart contracts mean that Ethereum can hold value and unlocks it when specific criteria are met.

More people using DeFi has left Ethereums blockchain congested. With a congested blockchain comes a slower one, too, and inevitably, the system becomes less efficient.

There are tens of thousands of applications built on the ETH blockchain, including new apps.

Phase 0 of the Ethereum 2.0 application is being launched tomorrow, which has led to a price rise over four days of 20% on the lead up to the launch.

Ethereum managed to reach a new multi-year high of $623. Investors expect the new upgrade to do wonders for ETH, and the price has seen a year high.

Since the 27th of November, ETH has seen bullish movement leading it into the promised land. The candles have been oscillating between bullish and bearish but are mostly bullish.

Looking at the Moving Average Convergence, it is clear that the bullish momentum is only picking up as the Ethereum 2.0 deadline draws. The bullish movement now has a 14-degree trend line.

Ethereum 2.0 what it means

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The new Ethereum 2.0 is meant to address the emerging problems Ethereum has. The issues the advancements will be addressing are security, efficiency as well as scalability.


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One weakness that most cryptocurrencies have to deal with is security, but Ethereum 2.0 will combat the security problems. Most PoS networks like Bitcoin only require a petite range of validators, but Ethereum 2.0 will need 16 minimum.

The new system will be able to operate more effectively with DeFi too.


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The upgrade should lead to a much more efficient system because the current Ethereum is only able to process 35 transactions per second. The narrow Ethereum 1.0 capacity results in a slower approach with delays, which incurs high gas fees on the network.

The upgrade will help solve this problem as it will mean that the system can process 100 transactions per second. The costs of gas to make transactions will also be lowered by the upgrade because individuals had to pay thousands due to the inefficiencies of ETH 1.0.


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Improving the scalability is regarding the capacity the blockchain network has to handle the amount of work it receives. In short, scalability means that the system is producing more transactions per second.

Ethereum 2.0 will mean that more smart contracts can be processed on the network. The upgrade will inevitably use less energy.

Proof of stake

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The new ETH will switch from the old, energy-consuming proof of work to proof of stake and further differentiate itself from Bitcoin.

When will Ethereum 2.0 be complete ?

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The Ethereum 2.0 will be a slow process, and it will release different aspects of the upgrade slowly to ensure everything works well.

The Ethereum founder on Twitter mentioned that the system could take up to two years to process the process stages, which he also outlined on Twitter. Vitalik Buterin said there are three main stages.

Regardless of how long the process takes, provided all the promises Mr. Buterin made are met, the upgrades will solve all the coin’s problems.

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Camomile Shumba

I am a freelance journalist that is always learning and investigating. I explore how current issues affect you. My training in journalism has enabled me to write thorough and compelling content.

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