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What is Ethereum 2.0? And Why is it Important in Blockchain Space?

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Ethereum 2.0

What is Ethereum 2.0? And Why is it Important?

Ethereum 2.0 (Eth2) is an upgrade to the Ethereum network. The upgrade improves the speed, efficiency, and scalability of the Ethereum network. With the current upgrade, Ethereum will undoubtedly be taken to new heights as the network will process more transactions, alleviate congestions, and high gas costs.

Ethereum 2.0

Once it reaches the final phase of upgrade known as “phase 2,” Ethereum will achieve its goals of being an open network for decentralized finance (DeFi). This article explores the features of Ethereum 2.0 and its importance to the blockchain and cryptocurrency industry.

What is Ethereum 2.0?

While we have been watching Bitcoin’s price soar to an all-time high, another cryptocurrency is doing its underground work to take the crypto industry by storm. Ethereum (Ether) is the second-largest cryptocurrency by market capitalization. Since the start of this year, it has been up by about 350%. Within the past week, it briefly went past the $600 mark for the first time since June 2018. This week, it slumped sharply and also went up to touch that level again.

Also Read: Proof-of-work vs proof-of-stake: Which is better for scaling blockchains

Investors have been keeping an eye on the upcoming upgrade to the underlying Ethereum network called Ethereum 2.0. It is a major upgrade to the current Ethereum public mainnet. The upgrade aims to accelerate Ethereum’s usage and adoption by improving its overall performance. Eth2 upgrade comes in phases, and they are as follows:

  • Phase 0

Phase 0 begins in 2020 with the launch of the “beacon chain” of the Ethereum network. The job of the beacon chain is to implement Proof-of-Stake. It will also manage the validators, which will begin attesting blocks into existence on Eth2. Before the beacon chain launches its genesis block, at least 524 288 ETH must be staked on the Ethereum network. These staked ETH will be divided among a minimum of 16 384 validators. The numbers were selected to ensure sufficient security and decentralization.

There will not be any distribution of staking rewards until the threshold is reached. For such reason, some altruistic behavior is needed among early participants in “Phase 0.” Meanwhile, as the beacon chain is launched and Proof-of-Stake is implemented, the original Ethereum Proof-of-Work blockchain will continue to exist. At this stage, the beacon chain will be unable to process transactions, execute smart contracts, or host dapps.

  • Phase 1

There is currently no specified date for the launch of Phase 1, but it is hoped that it will follow the beacon chain’s launch in phase 0. Phase 1 comes with implementing shard chains, which serves as the scalability solution in Ethereum 2.0. To implement sharding, the Ethereum blockchain will be partitioned into 64 separate chains called shard chains. These shard chains will run parallel to one another and interoperate seamlessly. To address the issue of scalability, sharding allows the Ethereum network to process multiple transactions at the same time. In theory, it will be 64 blocks at a time.

Currently, Ethereum and other Proof-of-Work chains can only process one block at a time. With multiple chains interoperating with one another, the data burden will be spread across all processed blocks simultaneously.

  • Phase 1.5

In the Ethereum community, this is the phase where the original proof-of-work (PoW) blockchain will be merged with the new proof-of-stake chain. The PoW Ethereum blockchain will exist as one of the 64 shard chains in the new Ethereum 2.0 chain. This means there will be no break in continuity or data history. It also means that ETH holders will not need to undergo token transfer or swap between Ethereum 1.0 and 2.0.

Also related: The evolution of DeFi and the impact on global financial system

ETH holders will use their ETH on Ethereum 2.0 without stress or their ETH risk becoming obsolete. Although the original proof-of-work chain’s history will still be in existence, it will no longer need the PoW consensus mechanism to be maintained.

  • Phase 2

Currently, phase 2 is less defined than phases 0, 1, and 1.5. We know that with the successful implementation of sharding and proof-of-stake, phase 2 will enable transactions, transfers, withdrawals, ether accounts, and smart contract execution.

What is the Current State of Ethereum 2.0?

The final testnet called “Medalla” for the new Ethereum has been deployed. Medalla is open to the general public and will also allow any of its five clients to connect to the network and communicate with one another. The five clients include Prysmatic Labs’ Prysm, PegaSys’ Teku, Status’ Nimbus, ChainSafe’s Lodestar, and Sigma Prime’s Lighthouse.

Since the network is public, network validators will not be centrally coordinated by developer teams. About 30,000 validators have so far joined the network, and more than 946,000 ETH has been staked. This test will run till the end of 2020, after which the mainnet will be officially deployed.

What is the implication for Blockchain and Crypto Investors?

Currently, more ether (ETH) is being stashed away for a restrictive multi-year “lockup” by holders who seek to become validators. This could impact the supply of ether, hence increasing the asset’s value once demand outpaces supply. There is also a great possibility that it will lead to innovation in the DeFi space. This occurs as investors seek to get some liquidity by borrowing against their locked up ether holdings.

Conclusion

There has been much discussion about Ethereum 2.0 in the blockchain space. With proof-of-stake and sharding, the new network will help improve scalability, security, and accessibility. For Ethereum holders, the upgrade presents them with opportunities to participate and receive rewards for maintaining the network. Kindly share you thought using the comment space provided below.

 

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What is Cryptocurrency And How Does It Work? 

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Obiex finance website

Cryptocurrencies are decentralized digital assets that operate on blockchain technology that in turn operates by storing a ledger of every transaction on all nodes powering the blockchain. 

In layman’s terms, blockchain technology is like a record keeper, it collects data (in blocks) and links one block of data to another, forming a chain. The data on the blockchain is open for all to see and cannot be easily altered. Blockchain technology can be used for a variety of use cases besides cryptocurrency, ranging from voting to crowdfunding, keeping health records, etc.

Using Bitcoin as an example, nodes are computers connected to the network to mine Bitcoin,  – this collection of independent nodes working together is what makes the network decentralized.

The decentralized nature of cryptocurrency is down to the creators recognizing flaws in traditional banking & financial systems like governments and financial institutions acting only in their best interests and not in the best interest of the common man, leading Satoshi Nakamoto (the creator of bitcoin and blockchain technology) to take steps to rectify that.

Related: What are NFTs?

To make cryptocurrency transactions, you will need to have a set of both public and private keys that will act as passwords protecting your crypto wallet. 

The Public key is connected to your wallet address, allowing you to share the address with others to receive cryptocurrency, while the private key is known to only you and is what you will use to approve outgoing crypto transactions from your wallet. 

Trading Cryptocurrency on Obiex

Obiex finance website

With the popularity of cryptocurrency trading currently at an all-time high, the biggest challenge for many rookie traders is selecting which cryptocurrency exchange to trade on.

If you fall in this category, the immediate priority should be finding an exchange that allows rookie traders to make trades easily, doesn’t charge extra fees and is completely secure. That exchange is Obiex Finance.

In this guide, you will be shown how to navigate the Obiex mobile app & website easily and what to do to get started with making cryptocurrency trades. 

Getting started with Obiex Finance 

Obiex Finance is a digital asset exchange and financial technology (Fintech) platform that gives its users the ability to easily execute cryptocurrency trades from anywhere regardless of their skill level.

Their commitment to ensuring that users get the best experience is shown in how they allow instant swaps from volatile coins like Bitcoin to stable coins like USDT, and vice versa, without confirmations. In a market where the value of crypto can fluctuate wildly, this feature is especially valuable as it allows users to seamlessly switch between making profits to saving those profits in a more stable currency before the value drops.  

To create an Obiex Finance account, simply head over to their homepage, click on “sign up”, fill in the required fields and verify your email address. After that, create wallet addresses for your crypto assets and you’re ready to start trading!

The cryptocurrency available for trading on the Obiex Finance platform are: Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB), Polygon (MATIC), Dogecoin (DOGE), Tether (USDT), Binance USD (BUSD), and USD Coin (USDC).

Getting Started with Cryptocurrency trading

After creating your Obiex account, you need to follow these simple steps:

  1.     Have a Trading Strategy: Trading cryptocurrency without having a strategy in place is the easiest way to lose your money. You will need to research the various crypto trading strategies thoroughly and choose the one that best suits your needs and temperament. For example, if you’re a patient person who is content to make smaller, safer trades over a long period of time instead of making riskier trades, then scalp trading is the best trading strategy for you. There are also other crypto trading strategies such as Swing trading, position trading, Arbitrage, dollar cost averaging etc.
  2.     Pick the cryptocurrency you’d like to trade: There are several cryptocurrencies available on Obiex Finance such as Bitcoin, Ethereum, Binance Coin, Tether etc. Selecting which cryptocurrency to trade is usually down to making a choice; whether to stick with the safer, more established cryptocurrencies like Bitcoin or to go with the more volatile coins that have a high upside and an equally high-risk factor like the Dogecoin which can move in either direction based on what Elon Musk tweets.

It is also important to note that when you pick a cryptocurrency to trade, it would be wise to ensure that the cryptocurrency matches the strategy you pick. For example, if your preferred strategy is patient scalp trading, then investing in volatile coins that have a high upside but carry a lot of risk is not the wisest move. 

To swap crypto on Obiex Finance, add the wallet of crypto assets you’d like to swap, send the crypto to the wallet you just created, navigate to the ‘swap’ option on your dashboard, and select the coins you’d like to swap. You will receive the swapped coin in your wallet balance immediately without waiting for network confirmations.

  1.     Securely store your cryptocurrency: The same way you’d protect your goods and profits if you had a physical store is the same way you need to protect your cryptocurrency so it doesn’t fall into the wrong hands.

You can store your crypto securely on your Obiex wallet but if you want an alternative, physical wallets are also an option. Physical wallets allow you to store your crypto in secure hardware, offline storage device reducing the likelihood of online hackers stealing your hard-earned crypto. This is a list of reliable physical wallets you can use.

Conclusion

If you’re a newbie to crypto trading, the keyword is patience. Taking the time to properly understand the market before making trades will stand you in good stead. While risks occasionally pay off, a patient, long-term strategy is required to make consistent profits. For more information about trading as a newbie, you can check this out to understand unfamiliar crypto terms and to learn more about spot trading and futures.

Obiex Frequently Asked Questions | Obiex FAQs

  • Will I be charged a fee when I swap coins on Obiex? 

No you won’t. While other crypto exchanges charge for trades and require confirmations to execute swaps, Obiex allows you to make free, instantaneous swaps without the delay that comes with waiting for confirmation. This also helps you avoid unnecessary losses.

  • Can I trade crypto on Obiex if I don’t know much about crypto? 

Yes, you can! The Obiex Finance platform allows both rookie and experienced traders to make easy, safe trades regardless of trading experience.

  • Can I send and receive crypto easily?  

Yes, you can. To send crypto, you will use your private key to execute outgoing trades and your public key/your wallet address to receive incoming trades. You can also send and receive crypto using just Obiex usernames.

  • Why do I need to swap coins? 

Swapping coins allows you to either acquire a coin you think is (currently) more valuable than a coin you have a lot of. You can also use swaps to ensure that your funds are invested in a more secure coin like USDT if you feel the volatile coin you’re holding is about to go on a bear run and lose value.

  • Do I get a referral bonus when I invite friends to use Obiex? 

Yes, Obiex has a referral campaign that rewards users that invite their friends and family to trade the minimum of $10 on Obiex.

 

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