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What are Ethereum 2.0 Updates?

Ethereum forever changed the kind of uses that can be given to the technology blockchain, as we can know Ethereum is about much more than a money transfer system Ethereum is a platform on which you can build smart contracts and decentralized applications, called dAPPs.

Before we can talk about Ethereum 2.0, we need to talk a little bit about Ethereum.

What is Ethereum?

According to the description found on its own page, it is defined as:  Ethereum is a global open-source platform, for decentralized applications. 

There are thousands of games, currency exchanges and all sorts of financial apps running on the Ethereumblockchain, just to mention a few of its apps.

Ethereum of course is not the only blockchain platform for smart contracts, over the years several competitors have emerged, such as TRON, Cardano and many others, who have taken advantage of ethereum’s successful model and at the same time overcome some of its disadvantages and limitations.

However, Ethereum is still the most popular smart contract chain in the world and nearly half of the top 100 cryptocurrencies run using the Ethereum platform, but Ethereum isn’t perfect.

Ethereum has some shortcomings, the most significant being its limited scalability, Ethereum is only able to facilitate approximately 15 transactions per second and therefore some applications have pushed the platform to its limits.

Etherium DeFi

It is also known as finanzas decentralized, this is a series of  dAPPs of which compound  finance  and  uniswap are the most famous, which offer traditional banking services using blockchain technology, without the need for banks.

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Users can send and receive ether and other currencies; they can also be made loans with certain interest and all that thanks to the automatic execution of smart contracts within the Ethereum network.

Many transactions that previously need banks as intermediaries, can be carried out 100% within the platform, the goal of DeFi  is to make irrelevant to banks and do all kinds of financial services to the billions of people who do not have access to a  banking account or simply offer an alternative.

For all the above is that the developers of Ethereum have found themselves in the need to make an update of it.

Upgrade to Ethereum 2.0

This aims to solve scalability issues, making Ethereum capable of supporting the tremendous workload of all smart contracts.

Some of its most significant changes is to work with a transaction validation mechanism, leaving aside miners, under a new philosophy of transaction validators, who have participation.

This way the impact on the environment will be minimal when compared to the one that miners put by just maintaining the system. Since, Blockchains grow constantly there’s the preoccupation that it will be no longer efficient to make new tokens by mining.

Another of its outstanding changes is the application of the so-called Beacon chain, which in a simplified way can be seen as a second layer and its purpose is to coordinate the main and anchor chain with those chain fragments.