Ethereum 2.0's Next Main Update: A Look at the Roadmap

Ethereum - A digital future on a global scale

The Ethereum protocol, which debuted in 2015, has seen tremendous success. However, the Ethereum community has always anticipated that a few key upgrades would be required to fully realize Ethereum's potential.

Because of the high demand, transaction fees have risen, making Ethereum prohibitively expensive for the average user. The amount of disk space required to run an Ethereum client is rapidly increasing. Furthermore, the underlying proof-of-work consensus algorithm that ensures Ethereum's security and decentralization has a significant environmental impact.

Ethereum has a set of upgrades that address these and other issues. This set of upgrades, originally known as 'Serenity' and 'ETH2.0,' has been a focus of research and development since 2014.

Now that the technology is ready and Ethereum 2.0 is live, these upgrades will re-architect Ethereum to make it more scalable, secure, and long-lasting - making life easier for current users and enticing new ones. All while maintaining Ethereum's fundamental value of decentralization.

Today's problems

For years, developer communities have debated the issue of blockchain scalability. Public blockchain networks, such as Ethereum, require multiple nodes to validate transactions, limiting their scalability.

Ethereum, for example, can handle 10-13 transactions per second. This pales in comparison to centralized systems such as VISA, which can handle up to 24,000 TPS.

If blockchains – and the decentralized applications that run on them – are to be widely adopted, population-level scalability is required.

• Clogged network: To better serve a global user base, Ethereum must reduce network congestion and improve speeds.
• Disk Space: Running a node becomes more difficult as the network grows. This will only become more difficult as the network is scaled.

Making Ethereum more centralized would be a naive solution to its problems. However, decentralization is far too important. Ethereum's decentralization provides it with censorship resistance, openness, data ownership, and near-unbreakable security.

Ethereum's vision is to become more scalable and secure while remaining decentralized. The scalability trilemma refers to the difficulty of achieving these three qualities.

Ethereum upgrades are aimed at resolving the trilemma, but there are significant challenges.

Understanding the Ethereum vision

1: Scalability

Ethereum must be able to handle more transactions per second without increasing the network's node size. Nodes are essential network participants who store and operate the blockchain. Increasing node size is impractical because it requires powerful and expensive computers. To scale, Ethereum requires more transactions per second as well as more nodes. More nodes equals greater security.

Sharding upgrades will distribute data storage requirements across the entire network, eliminating the need for each node to hold 100% of the data. Although this does not directly address scaling transaction execution, it is addressed directly by layer-2 rollup solutions.

Rollups, on the other hand, require cheap storage on layer 1 to be effective. Sharding will give Ethereum breathing room by maximizing rollup efficiency, allowing for exponential improvements beyond the current 15-45 transaction per second limit.

2: Security

The planned enhancements strengthen Ethereum's defenses against coordinated attacks.

Greater crypto-economic disincentives against attack provide additional security in proof-of-stake. This is because the validators who secure the network in proof-of-stake must stake significant amounts of ETH into the protocol. If they attempt to attack the network, the protocol will destroy their ETH.

However, it is critical that upgrades that protect validators from denial-of-service attacks, improve their anonymity, and separate block building and block propagation be implemented as soon as possible. These enhancements protect individual validators as well as the network as a whole from liveness attacks and censorship.

Sharding is also supported by Ethereum's security model. Validators will be responsible for ensuring that all data is available, but individual nodes will no longer be required to store the entire chain's history. A dedicated block builder, who will work alongside block proposers (validators) to ensure efficient and safe block production, is also expected.

Staking also eliminates the need to invest in high-end hardware in order to participate directly in consensus. This should encourage more people to become validators, further decentralizing the network and reducing the attack surface area.

3: Sustainability

Ethereum has evolved into a green blockchain. When proof-of-stake was used instead of proof-of-work, energy consumption was reduced by 99.95%.

This increase in sustainability also has security benefits: staked ether makes it much more expensive to attack the chain than proof-of-work, but it is less expensive to secure because less new ETH is issued to pay validators rather than miners.

Ethereum 2.0's Next Main Update - Sharding

Sharding could be available in 2023. Shards will increase Ethereum's capacity to store and access data, but they will not be used to execute code.

What is sharding?

Sharding is the process of horizontally splitting a database to spread the load; it is a common concept in computer science. In an Ethereum context, sharding will complement layer-2 rollups by spreading the burden of handling the large amount of data required by rollups across the entire network. This will continue to reduce network congestion while increasing the number of transactions per second.

Sharding is for everyone

If you want to keep things decentralized, sharding is a good way to scale; the alternative is to increase the size of the existing database. Because powerful and expensive computers are required for network validators, Ethereum would become less accessible. Validators will no longer be required to store all of this data themselves thanks to sharding, but will instead be able to use data techniques to confirm that the data has been made available by the network as a whole. By reducing hardware requirements, this drastically reduces the cost of storing data on layer 1.

Sharding will allow you to run Ethereum on a personal laptop or phone in the future. As a result, in a sharded Ethereum, more people should be able to participate or run clients. This will improve security because the smaller the attack surface area, the more decentralized the network.

Because of the lower hardware requirements, sharding makes it easier to run clients on your own without relying on any intermediary services. Consider running multiple clients if possible. This can improve network health by reducing points of failure.

Why sharding is great

Sharding is the future of Ethereum scalability, and it will be critical in allowing the ecosystem to support many thousands of transactions per second while also allowing large portions of the world to use the platform on a regular basis at a low cost.

A sharded blockchain can overcome the scalability trilemma:

• Scalable: It is capable of processing far more transactions than a single node.
• Decentralized: It can run entirely on consumer laptops, with no reliance on "supernodes."
• Secure: An attacker cannot target a specific part of the system with limited resources; they can only attempt to dominate and attack the entire system.

Conclusion

Sharding, a multi-phase upgrade to improve Ethereum's scalability and capacity, will be the next major update.

The primary goal of sharding is to replicate the most important security properties of traditional (non-sharded) blockchains while eliminating the need for each node to personally verify each transaction.

Sharding allows for the secure distribution of data storage requirements, lowering the cost of rollups and making nodes easier to manage. They allow layer 2 solutions to offer low transaction fees while leveraging Ethereum's security.

This upgrade has become more of a focus since Ethereum switched to proof-of-stake, and many layer-2 solutions have been waiting for it for a long time.

While estimates differ, sharding is expected to scale Ethereum to handle hundreds of thousands of transactions per second. Higher TPS rates enable Ethereum to provide the scalability required by dApps to handle spikes in usage and billions of users.

All in all, we can all look forward to the sharding update and watch eagerly to see if it will solve the scaling issues of blockchain technology in the long run.