The transition to Ethereum 2.0 and its proof-of-stake consensus mechanism is finally underway.
- Announced Monday, Ethereum developers have released a "validator launchpad" on the Medalla testnet to educate and prepare future validators as part of a multi-year, multi-stage roll out of the Ethereum network's most important upgrade to date.
- Eth 2 will radically transform the world's largest smart contract platform as it shifts from proof-of-work (PoW) to proof-of-stake (PoS).
- In PoW, miners do the job of validating transactions through complex math solved by computer hardware and then adding them to a data block in a series, or chain, that is cryptographically secured.
- PoS, on the other hand, lets entities known as validators lock up holdings of a network's cryptocurrency as collateral for the right to validate a transaction without the need for computer hardware. Validators are rewarded based on how much crypto they initially stake.
- The transition to PoS is aimed to improve Ethereum's scalability issues that arise from its inability to handle a large quantity of transactions under PoW. PoS also expected to be more cost-effective than mining.
- Three phases of the rollout are planned, with the first, phase 0, focusing on the underlying tech behind staking by tracking validators and their balances.
- The launchpad, which comes before phase 0, will enable validators to track and deposit test stakes on the upcoming Medalla multi-client testnet.
- When phase 0 arrives, validators will start securing Eth 2's network with real stakes.
- Phases 2 and 3 will revolve around adding and storing Eth 2 data and enabling programs to be run on the network, respectively.
- The legacy Ethereum platform will exist for some time as its own independent PoW chain, but the developers stressed the "transition toward PoS starts now" in Monday's announcement.