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Cryptocurrency Knowledge

What is Ethereum 2.0?: All You Need To Know About

Ethereum is familiar to all of us, but now the bigger update “Ethereum 2.0” is on its way to launch on December 1, which will ultimately improve scalability, security, and sustainability.

Also, various teams of the Ethereum ecosystem are building these upgrades.

The long-planned Ethereum network update is on the horizon to address problems with the scalability and security of the network.

Ethereum 2.0 will come out in several “phases.” Each phase will boost Ethereum’s functionality and performance in numerous ways.

The beacon chain genesis of Ethereum 2.0 is now planned to take place on the earliest feasible launch date of December 1.

Let’s go deeper to understand Ethereum 2.0 and what significant improvements are coming out of it.

The Use of Ethereum

Ethereum is accessible to everyone. There is no involvement of the government or corporation in Ethereum.

Also, it is almost impossible for someone on Ethereum to prohibit you from collecting payments or using services.

Ethereum provides you convenient access to financial services and an internet connection is all you need to access its lending, investing, and savings services.

Moreover, to use an Ethereum application, your personal details are not required.

Without going through intermediary firms, you can also make deals and directly transfer cash to someone else with Ethereum.

All the time better apps and experiences are being developed because Ethereum products are by default compatible.

Moreover, customers have a secure, built-in assurance that if you provide what has been negotiated, funds will only change hands.

What is Ethereum 2.0?

By market cap, Ethereum is the second-largest cryptocurrency. The team of Ethereum is now planning to give a major update to its network. It is going to roll out on Dec 1, 2020.

Moreover, Ethereum 2.0 can also be understood by Eth2 or “Serenity”. The coming upgrade of Ethereum 2.0 will be more scalable, fast, and safe by introducing new proof of stake (PoS) protocol, virtual machines (VM), sharding, and more.

What is New in Ethereum 2.0?

This is the upgraded version of Ethereum 1.0 so there are some changes and improvements in it.

This new upgrade “Ethereum 2.0” offers two major improvements such as Proof of stake and Shard Chains.

Proof of Stake:

Presently, the Ethereum blockchain works on the proof of work consensus protocol.

The current consensus relies on solving complex math problems via huge computing power.

Moreover, this uses a lot of energy on the blockchain to check transactions.

On the other hand, Proof of Stake (PoS) depends on ether validators and deposits, saving a significant amount of energy consumption.

Shared Chains:

Each blockchain node must save the entire copy of the distributed ledger, making the process of verification slower.

What shard chains do is that a transaction is broken down into shards (small bits of transactions) and distributed to the network.

Each node can operate side-by-side on verifying transactions, reducing the time taken overall.

EVM to eWASM:

Smart Contracts are pieces of code that run automatically when a specific event occurs.

Also, they are the Ethereum blockchain’s USP and are the network’s real foundations.

In Ethereum 1.0, on the Ethereum Virtual Machine (EVM), these smart contracts were executed.

The EVM is an environment that allows for the execution of the actual code of smart contracts and dApps, the storage of the database, and the documentation of transactions.

Furthermore, Ethereum 2.0 supports the use of the Ethereum Web Assembly or eWASM. The language of the web assembly allows the code to be executed anywhere in the web browser.

When it comes to strengthening security, eWASM is better than EVM. For writing code for smart contracts and dApps, it supports various conventional programming languages such as C, C++, and Rust.

Utter Security:

With security in mind, Ethereum 2.0 has been invented. There are a limited number of validators in most proof of stake networks, which allows for a more centralized system and reduced network security.

At minimum 16,384 validators are needed for Ethereum 2.0, making it much more decentralized and thus, stable.

For Ethereum 2.0, the Foundation is setting up a dedicated security team to study potential cryptocurrency cybersecurity issues.

The Phases of Ethereum 2.0 (Roadmap)

This Eth2 update will be released in phases in order to ease the transition for Ethereum users to the new platform. The date has come out of the Phase 0 launch on Dec 1.

There will be a total of four phases:

=> Phases 0, 1, 1.5 and 2.

Let’s commence by looking at the Ethereum 2.0 Roadmap.

Phase 0:

On December 1, Phase 0 of Eth2’s beacon chain will take place. Proof of Stake (POS) will be enforced by the beacon chain and the validator list will be monitored, which will begin to confirm the existence of blocks on eth2.

On November 4, the conversion of 524,288 Ethereum from 16,384 validators into the Ethereum 2.0 deposit contract was carried out.

However, the people who have participated in genesis will not withdraw their coins until Ethereum 2.0 hits Phase 1.5.

The actual Ethereum PoW blockchain will persist to operate as the beacon chain goes live and Proof of Stake is integrated.

Phase 1:

The launch of Phase 1 is scheduled to take place somewhere in 2021.

Implementation of shard chains is the primary creation of Phase 1. The information on shard chains is mentioned above.

Moreover, sharding would result in the Ethereum blockchain being split into 64 different chains (called shard chains) for Ethereum 2.0, which run parallel to each other and seamlessly interoperate.

Phase 1.5:

Phase 1.5 will be the temporary update in 2021. The Ethereum main net will officially become a shard and turn to the proof of stake.

Phase 2:

And in late 2021 or maybe in 2022, the final phase will roll out. As of now, not much has been determined about this phase.

Phase 2 according to sources, will include adding accounts, allowing transfers and withdrawals, developing development environments to create DApp on top of Ethereum 2.0, and having people use the updated blockchain.

And Ethereum 1.0 (based on PoW) will be fully gone by then.

The Bottom Line

In the blockchain ecosystem, Ethereum 2.0 has been long-anticipated and much debated.

Scalability, protection, and accessibility will be dramatically improved by proof of stake and sharding.

Ethereum 2.0 presents a new way for ETH holders to participate and gain rewards for sustaining the network.

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Knowledge

Bitcoin vs Ethereum: What is the Exact Difference in 2020

Today we are going to discuss Bitcoin vs Ethereum (huge currencies in the market), like what are the similarities, the differences, etc.

There are thousands of cryptocurrencies in the market and new ones are coming day by day, yet these two currencies still stand on TOP.

However, if we talk about the blockchain of Ethereum then it is totally different from bitcoin’s blockchain.

Bitcoin was exclusively developed as a digital currency while the Ethereum blockchain is a more general blockchain technology implementation.

Both coins allow anonymous transactions and there is no government involvement in managing or controlling the currency. 

What is Bitcoin?

Bitcoin (BTC) is a decentralized cryptocurrency that allows people to send and receive money around the world. It is the main cryptographic capital ever to exist. Read everything about Bitcoin here.

What is Ethereum?

Ethereum is an open platform for blockchain, allowing everyone to create and use decentralized apps running on blockchain technology.

It is an open-source project created by many people around the globe. It is the same as a Bitcoin no one owns or handles the Ethereum.

However, Ethereum is totally different from the Bitcoin protocol, Ethereum was designed to be flexible and scalable.

Moreover, Ethereum allows users to build their own operations of whatever complexity they choose, rather than giving users a collection of predefined operations (for example, Bitcoin transactions). 

Ethereum allows smart contracts and decentralized applications (dApps) to be deployed and run without any third party downtime, fraud, control, or intervention.

Ethereum’s potential applications are wide and driven by its native cryptographic token, ETHER.

Ether is like the fuel on the Ethereum platform for running commands and is used by developers to create and run applications on the platform.

Ether is primarily used for two purposes. First, it is used as a digital currency exchange in the same way as other cryptocurrencies and second, it is used to operate applications on the Ethereum network.

Now let’s dig in straight to the Bitcoin vs Ethereum.

Bitcoin vs Ethereum: Comparison

Bitcoin and Ethereum both have been gaining great hype these days.

Moreover, Bitcoin has become a globally famous and well-known cryptocurrency. it still has the largest market value compared to all of the cryptocurrencies available right now.

Conversely, Ethereum did not have a groundbreaking influence like Bitcoin, but its developer learned from Bitcoin and created more features based on Bitcoin principles.

Ethereum is actually the second-most-value cryptocurrency on the market.

Let’s understand the difference by considering the various aspects.

Purpose:

Bitcoin is a digital currency or also it can be considered as an alternate currency. Whereas, Ethereum enables peer-to-peer contracts and applications via its own currency vehicle.

That’s why Bitcoin has emerged as a digital currency which is more secure, while Ethereum is more about smart contract apps.

By serving as a building platform for DApps/smart contracts, Ethereum also differs, allowing it to submit tokens that represent values.

Other than digital currencies, these values can be stuff, making it distinct from Bitcoin.

Price predictions:

As per the investing purpose, let’s first talk about the price prediction of both ETC & BTC. 

BTC closely follows the pattern of the previous two halves, as per the stock-to-flow price model. 

The model indicates that, over this four-year halving period, BTC could hit $288,000.

Likewise, data research firm Econometrics recently released a $41,000 price target for BTC by the end of 2020.


All in all, both cryptocurrencies may be interesting opportunities for investment and have a position in an investment portfolio.

Mining:

In Bitcoin, with the method known as work proof, miners can verify transactions. The same process goes with the Ethereum.

However, Ethereum is going to switch to proof of stake. Now, what is proof of stake, well with proof of stake, a person can mine or validate the transaction in a block based on how many coins he owns. 

In the case of Bitcoin, each time a miner adds a block to the blockchain, he will be rewarded with 12.5 Bitcoins. The next time the payout will be cut in half in 2020.

For Ethereum, any time a block is added to the blockchain, a miner or validator obtains a value of 3 ether in Ethereum, and the reward will never be halved.

Fees:

Starting with Bitcoin, for each and every transaction, miners charge certain transaction fees.

If you want to process your transactions more efficiently, you can apply larger fees to your transaction which can then attract miners.

On the other hand, Ethereum does not use transaction fees, but it has a gas system. Gas is a device that calculates the amount of machine effort needed to conduct such operations.

Solidity is used to code all the smart contracts that run in the EVM. A certain amount of gas is required for each line of code in solidity to be computed.

Block Size:

One of the most asked question is the “block size”. 

In comparing Bitcoin versus Ethereum, the block size is significant. It plays a key role in the determination of a blockchain’s transaction costs, confirmation times, and scalability.

Currently, blocks are 1 MB on the Bitcoin network. Disagreements about the size of the block finally led to Bitcoin Cash produced as Bitcoin’s fork.

Whereas talking about Ethereum, the size of the block measured in gas, with each block limited to 12.5 million gases.

As recently as June 2020, the gas limit was raised from 10 million to relieve the burden on the network, improve processing capacity, and minimize the fees.

Daily Transactions:

Bitcoin has been handling more than 25k+ transactions per day. The last record on 29 Sept 2020 was 297814. 

As cryptocurrency interest grew and cryptocurrency market caps hit peaks during the crypto boom of 2017-early 2018, regular transactions on December 14, 2017, also grew to a total of 490644 transactions.

On the contrary, the daily amount of transactions done on the Ethereum network is represented by Ethereum Transactions Per Day.

Ethereum Transactions Per Day is at a current level of 1.088M on 29 Sept 2020. It was the highest recorded at 1.35 million transactions on January 4, 2018.

Time:

As for the average amount of time, it takes 10 minutes for Bitcoin to add a block to the blockchain and It just takes about 12 to 15 seconds for Ethereum.

Check out our guide on which cryptocurrency offers the fastest transaction speed.

Hash Algorithms:

Hashing algorithms mean how these systems can protect their privacy and ensure safety. 

Bitcoin uses an SHA-256 hashing algorithm, whereas Ethereum uses a cryptographic algorithm called Ethash.

Technology:

In terms of technology, Ethereum takes the prize. Here are the reasons why Ethereum is better at technology than Bitcoin. 

  • In 2015, the Ethereum blockchain was released. In contrast to the Bitcoin blockchain (released in 2009), it is 6 years younger and further established.
  • Ethereum brought smart contracts. Moreover, you can use smart contracts for a lot many things compared to Bitcoin uses.
  • A more advanced edition of Bitcoin’s blockchain is Ethereum’s blockchain. It solves some of its problems and adds new functionality, such as smart contracts.
  • Ethereum’s transactions cost much less, yet they are faster too.
  • Last but the least, The transaction fees of Ethereum are far lower than the transaction fees of Bitcoin.

Bitcoin vs Ethereum: which currency is better

Though, both currencies Bitcoin and Ethereum have their own advantages. 

Bitcoin has a smaller supply of coins and is more liquid than Ethereum, but Ethereum has stronger technology than Bitcoin and offers more benefits.

Moreover, if we talk about the peer-to-peer transaction system, then Bitcoin works better. And Ethereum works well when you need to develop and build distributed applications and smart contracts.

Now the decision is on your own!

Conclusion:

Both Bitcoin and Ethereum are highly important and useful

Even if you are not a serious investor/merchant in cryptography, by buying BTC or ETH tokens, you will not go wrong. 

They both add enormous value to the world of crypto.

Ethereum has unlimited use cases, whereas Bitcoin just solves problems with transfers and banking.

No doubt, Bitcoin has a better value and position in the market, but Ethereum has improved technology and greater ability.

If you want either of these currencies to use on your website as a payment option you can consider the reliable payment gateway “Coinremitter”. Which can seamlessly handle all your transactions.

SO, what are your thoughts on Bitcoin vs Ethereum? Have you figured out which currency works best for you?

Share your thoughts in the comments, we would love to hear.

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Knowledge

Understanding DeFi And It’s Way Of Work

The new technology called DeFi (Decentralized Finance) has been taking its place in between the market of cryptocurrencies and blockchain-based decentralized firms.

This particular object refers to smart contracts, digital assets, and decentralized applications on the Ethereum.

To understand DeFi in simpler terms, it is a financial software built on a Blockchain. In the year 2019 DeFi has quickly become the topic of conversation as the big thing coming out from the Ethereum network.

Since the digital era has started subsequently, everything has now gone digital. From product purchase meant to demand service.

Many technologies are exponentially changing the way of living then how could currencies be excluded from it?

However, To understand DeFi we must go through from the beginning of it, and understand the way of its work.

What Is DeFi? 

As stated above, it is a financial tool built on the blockchain on the network of Ethereum. One of the main things for DeFi is to make financial service open for everyone.

Moreover, it makes to short the people’s trust, central agencies. These following things like cryptography and specifically blockchain are building trust between the individuals. Where they can safely store their private data, transactions, or amount in the digital wallet without any involvement of Centralized firms.

On the network of blockchain, You can verify data by becoming an individual entity or any transaction which supposedly occurs on the blockchain.

In contrast, this is an open service to anyone. In the term of DeFi applications, they are called Dapps (Decentralized Apps).

They are likely a Peer 2 Peer financial framework and their work is to lure to trade and hold financial assets with the least involvement of third parties. They are structured on the fundamental design of a Blockchain.

All the DeFi applications are mainly built on Ethereum Blockchain Network.

Smart Contracts:

On the Ethereum network, the system can maintain a digital value of ledger. The users or developers can run applications on the Ethereum blockchain simultaneously to create or maintain digital coins, or assets.

This however is called smart contracts. These smart contracts are waged by the Ethereum blockchain network.

One of the notable things is that these contracts are invariant and can be created without the involvement of third parties.

DeFi has the ability to make the financial service even simpler and fetch the transparency in the financial service.

As this is an open-source material, therefore, anyone can make their own smart contract and can use some of the information from the existing smart contracts with this functionality user/developer can compare both contracts and choose the appropriate service for them to use.

What Are The Benefits Of DeFi?

By eliminating the involvement of the third person it does provide the low cost & less transaction time.

Although, it gives freedom to those who don’t have permission to access financial services. The following benefits are:

  • Like centralized governance, you don’t have to take the form of capital in Decentralized finance.

  • More in that, it can allow you to put your money on individual work and maintain a stable value for your money.

  • You’ll conjointly have full control of your finance. In general, Dapps let you deposit your digital cryptocurrency without letting anyone stand in front of you.

  • Not only normal users but also owners who are creating financial products are seamlessly accepting DeFi service in order to create a futuristic financial service.

  • Since the decentralized currencies have introduced to the world moreover, they have no obstacles to in between the border. Just like this DeFi has been working on the same concept conversely, with better ways.

Last Words

In conclusion, there are so many new things that have yet to come out in the DeFi service.

All we can do is to wait until the service gets even better and sophisticated for individuals.

Understanding DeFi can be convoluted sometimes but one thing to keep in mind is that it allows you to enter into a finance world with having the least knowledge about it.

Regardless, seeing the future of DeFi, it looks bright, and showing the popularity of Blockchain is clearly inevitable for the future of financial service.