Why is Ethereum 2.0 so important?

What is Ethereum 2.0 is one of the most discussed questions since 2020. In this article, we will try to briefly answer the question of what is Ethereum 2.0.

What is Ethereum 2.0?

Etheruem 2.0 will be on the cryptocurrency markets on May 11, 2020 It has the title of the biggest event expected after the Bitcoin halving.. As it will be remembered, on May 11, the annual market supply of Bitcoin decreased by half.. In this way, Bitcoin has become a more scarce economic asset.

Ethereum 2.0 is the name of a long-running update working on the Ethereum blockchain.. Once the Ethereum 2.0 update is complete, Ethereum 1.0 will be migrated to the fully updated, fast and reliable Ethereum 2.0 blockchain.

Ethereum is home to many DeFi platforms, smart contracts, dapps, stablecoins and ERC 20 tokens.. In short, Ethereum is the mother of many altcoins.. All these guests on the Ethereum network make the Ethereum network quite tiring and cumbersome. Ethereum will switch from PoW-type mining to PoS-type mining to get rid of this cumbersomeness and become scalable.. PoS type mining brings innovations in many aspects.. Let’s take a look at the innovations brought by the PoS system item by item:

• PoW system seriously needs energy and operating power. Currently, cryptocurrencies such as Bitcoin, Litecoin, Ethereum and Bitcoin Cash are carried out with PoW type mining.. Only the Bitcoin blockchain network consumes electricity equivalent to the annual Austrian economy.. Naturally, the first advantage of the PoS system will be cost savings.
• In the PoW system, recording the transactions performed on the blockchain to the network becomes difficult due to the algorithm. This makes blockchain networks cumbersome. Therefore, with the PoS system, the Ethereum blockchain network will be able to become faster.. It will be able to host more smart contracts, DeFi platforms and tokens.. In PoS type mining, operators are required to lock Ethereum to the system to mine. For each node, miners are required to stake 32 ETH into the system. Considering the need for tens of thousands of nodes in the PoS system, a large amount of Ethereum will be withdrawn from the market.

What is Ethereum 2.0? Will Ethereum 2.0 affect ETH prices? What we don’t know about Ethereum 2

The amount of Ethereum locked on DeFi platforms corresponds to 6% of the total Ethereum supply. After the PoS system, Ethereum will become more scarce as a larger amount of Ethereum will be withdrawn from the market.

As a result, the ETH/USD parity can gain serious value thanks to Ethereum 2.0.

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