Ethereum 2.0 is Out Now, But Can It Beat Bitcoin?

Isaiah McCall

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Ether, the world's second-largest virtual currency is on the move — and it’s making investors rich. Earlier this week Ethereum 2.0 launched and will make Ether faster and more secure. The upgrade allows for thousands of more transactions to take place every second.

This year, Ether is up 350%. Furthermore, it brushed an all-time high of $600 for the first time since June 2018. In case you don’t have $19,000 laying around to invest in Bitcoin, now may be the best time to look into Ether.

“As the ETH 2.0 launch date approaches, it seems to be a growing correlation between $ETH price,” said Ki-Young Ju, CEO of CryptoQuant. He indicated that Ethereum holders may benefit from more market optimism as the update arrives.

Prior to 2.0, Ethereum’s blockchain technology wasn’t seen to be as scalable as Bitcoin’s network. In 2017, for example, the popularity of an Ethereum-based game called CryptoKitties caused the network to become heavily congested, significantly slowing trade.

Ethereum 2.0 plans to change that. And with it’s more advanced capabilities, the market gap between Bitcoin and Ether could shrink.

What will Ether 2.0 do?

Ethereum 2.0 is an upgrade to the cryptocurrency’s blockchain. And in case you’re not familiar with blockchain technology, here’s a brief overview: Blockchains allow any participant in any given network to manage Ether (or Bitcoin’s) ledger without a central authority to enforce the rules. For example, you don’t need to go to a bank to withdraw Ether, it’s a decentralized currency that’s run by a network of individuals.

Decentralized means you could write Ether’s ledger or even your grandma. Unlike banks, the currency is in the hands of the people.

“Within five to 10 years, these decentralized platforms will be on par with centralized platforms. Then it’s gameover for the centralized platforms.”

The removal of central authority from database structure is one of the most important and powerful aspects of blockchains. Here are the three different types of blockchains:

  • Public blockchains: “Public blockchains, such as Bitcoin, are large distributed networks that are run through a native token. They’re open for anyone to participate at any level and have open-source code that their community maintains.”
  • Permissioned blockchains: “Permissioned blockchains, such as Ripple, control roles that individuals can play within the network. They’re still large and distributed systems that use a native token. Their core code may or may not be open source.”
  • Private blockchains: “Private blockchains tend to be smaller and do not utilize a token. Their membership is closely controlled. These types of blockchains are favored by consortiums that have trusted members and trade confidential information.”

So, Ethereum 2.0 promises to boost the speed, efficiency, and scalability of a parallel blockchain network called Beacon. This parallel blockchain is a test aside from the main network. It will help Ether miners validate transactions more efficiently on the network ahead of a full migration to Ethereum 2.0.

The move is set to greatly benefit Ethereum and the many projects that operate on Ethereum’s blockchain.

“It’s a little bit like the launch,” Konstantin Richter, CEO of blockchain software firm Blockdaemon, told CNBC. “The rocket is now taking off. We’ve committed to the journey. We’re still on the launchpad but all will be achieved when we land on the moon. At this point, we’re launching the official end to the old Ethereum.”

What does it mean for investors?

In case you live under a rock, cryptocurrency is booming this year. The U.S. government is printing money. Inflation is up. Your friendly neighborhood

Tim Denning writes about it all the time.

So, naturally, Bitcoin and Ether are on the rise this year. Ethereum 2.0, however, may one day give it the edge in the crypto race.

Right now is the perfect time to invest in cryptocurrency. The pandemic is the perfect storm. The U.S. dollar is devaluing by the second and investors are turning to crypto.

“It’s a great testament to the Ethereum Community,” Vitalik Buterin, founder of Ethereum, said this week, ahead of the launch. Afterward, he added, “Congrats on the launch all!”

The next step for Ether is creating shard chains, ideally by 2021. Without getting too deep in the weeds, shards will theoretically allow the blockchain to handle many more transactions per second than proof-of-work Ethereum. So, in summation, the network will get even faster.

What to do if you’re already invested?

If you’ve invested in Ethereum already, you do not need to make any changes to prepare for 2.0. Just sit back and enjoy the show.

Further down the road, crypto experts say Ethereum 2.0 should help the Ethereum network run at scale, processing lots more transactions at a faster pace and supporting apps with millions of users.

“Within five to 10 years, these decentralized platforms will be on par with centralized platforms,” Richter predicts. “Then it’s gameover for the centralized platforms.”

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USA Today Reporter and Ultramarathoner. I write about Cryptocurrency, Fitness Hacks, and Greek Philosophy. Also a diehard Trekkie | mccallisaiah@gmail.com

Jersey City, NJ
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