What is Ethereum 2.0? Is it different from Ethereum?

By October 23, 2020March 28th, 20224 minute read
What is Ethereum 2.0? Is it different from Ethereum? | WazirX

What Is Ethereum?

Ethereum is the second-largest cryptocurrency platform by market capitalization, behind Bitcoin.

Ethereum has open access to digital money and data-friendly services for everyone despite your background or location. It’s a community-built technology behind the cryptocurrency Ether (ETH) and thousands of applications you can use today.

Ether is like a vehicle for moving around on the Ethereum platform and is sought by mostly developers looking to develop and run applications inside.

1 ETH Ethereum = 25,712.66 INR at the rate on 06-10-2020.

Who Created Ethereum?

Ethereum Foundation is the governing body responsible for the development of this open-source blockchain platform.

The Ethereum Foundation (EF) is a non-profit organization dedicated to supporting Ethereum and related technologies.

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The EF is not a traditional non-profit or a company. This means their role is not to control Ethereum and they are not the only organization that funds the development of Ethereum-related technologies.

How Can You Use Ethereum?

Ethereum is open to everyone. No government or company has control over Ethereum. It is nearly impossible for anyone to stop you from receiving payments or using services on Ethereum. Anyone from any part of the world can write and develop applications on Ethereum involving some digital value – lending, borrowing, investing, trading, etc.

  • Banking

Ethereum gives you easy access to financial services and all you need to access its lending, borrowing, and savings products is an internet connection.

  • Private Internet

Your personal details are not required to use an Ethereum application.

  • Peer-to-peer connections

With Ethereum, you can make agreements and move money directly with someone else without going through intermediary companies.

  • Compatibility And Commerce

Better products and experiences are being built all the time because Ethereum products are compatible by default. Customers have a secure, built-in guarantee that funds will only change hands if you provide what was agreed.

In a way, Ethereum builds on Bitcoin’s innovation, including some big differences. Both let you use digital money without payment providers or banks. However, Ethereum is programmable, so you can also use it for lots of different digital assets.

This means Ethereum is for more than payments. It is a marketplace of financial services, games, and applications that cannot take your data or censor you.

What Is Ethereum 2.0?

Ethereum 2.0 is an upgrade to the Ethereum network, giving it the scalability and security it needs to serve all of humanity. Ethereum 2.0 will be released in multiple “Phases” starting in 2020. Each phase will improve the functionality and performance of Ethereum in different ways.

Transition To Ethereum 2.0

The highly anticipated launch of Ethereum 2.0 is expected to have little to no impact on users and decentralized applications currently operating on Ethereum.

Ethereum 2.0 will reduce energy consumption, allow the network to process more transactions, and increase security. Technically speaking, Ethereum will become a proof-of-stake blockchain and introduce shard chains. This is a huge change to how Ethereum works and it should bring equally huge benefits.

But it’s only a change to Ethereum’s infrastructure. If you’re already an ETH holder, you don’t need to do anything because Ethereum 2.0 will be compatible with the main Ethereum network you use today. You’ll be able to use the ETH you own today in Ethereum 2.0 too.

What is the difference between Ethereum 1.0 and Ethereum 2.0?

From Ethereum 1.0 to Ethereum 2.0, users and developers will begin to see noticeable improvements to transaction efficiency on the merged network immediately.

There are two primary improvements introduced by Ethereum 2.0 that do not exist in Ethereum 1.0: Proof of Stake and Shard Chains.

Proof of Stake: Ethereum 1.0 runs on a consensus mechanism known as Proof of Work (PoW). Proof of Stake (PoS) is an upgrade that enables improved security, scalability, and energy efficiency.

Shard Chains: Shard chains are a scalability mechanism which drastically improves the throughput of the Ethereum blockchain. Shard chains are a mechanism through which the Ethereum blockchain is “split”. This allows for transactions to be processed in parallel rather than consecutively. Each shard chain is like adding another lane to upgrade Ethereum from a single lane road to a multiple lane highway. More lanes lead to much higher throughput.

Ethereum 2.0 will primarily benefit the scalability, throughput, and security of the Ethereum public mainnet. Ethereum 2.0 will not eliminate any of the data history, transaction records, or asset ownership of the Ethereum 1.0 chain.

The Ethereum 2.0 upgrade is the technology and multi-year roadmap intended to transition the world’s second-largest blockchain by market capitalization from PoW to PoS.

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Can I Invest In Cryptocurrency?

Yes, with exchanges like WazirX, you may invest in cryptocurrency in India. To begin, go to the WazirX website and register. After that, you will receive a verification email. The link received by verification mail will only be available for a few seconds, so make sure you click it as quickly as possible. This will successfully verify your email address. The following step is to set up security, so choose the best solution for you. After you've set up the security, you'll be given the option of continuing with or without completing the KYC process.

How Safe Are Cryptocurrencies?

Cryptocurrencies can be safe, but your crypto wallets can be hacked if proper security steps are not performed.There are also dangers and uncertainties associated with investments, and we cannot declare any virtual currency investment risk-free. Buying and selling cryptocurrencies does not have to be dangerous if the trader is well-versed in the market and treats his coins with care.

Is Crypto Legal In India?

Cryptocurrencies are legal in India, and anyone can purchase, sell, and exchange them. It is currently uncontrolled, as India lacks a regulatory structure to oversee its operations. Per the Ministry of Corporate Affairs, companies must now record their crypto trading/investments within the financial year. In cases where a person receiving the gains is an Indian tax resident, or the cryptocurrency is regarded as domiciled in India, cryptocurrency transactions have been taxable in India

How To Invest In Cryptocurrency Stocks?

Cryptocurrency can be purchased in two ways: through mining or exchanges. The process of confirming and adding transactions to the blockchain public ledger is known as cryptocurrency mining. Cryptocurrency exchanges are another option. Exchanges make money by charging transaction fees, but there are alternative platforms where you may communicate directly with other cryptocurrency traders.

What Is Crypto?

Crypto or a cryptocurrency is a digital currency protected by cryptography, making counterfeiting and double-spending nearly impossible. Blockchain technology is used to produce cryptocurrencies (a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are distinct in that a government does not issue them. The word "cryptocurrency" refers to the encryption methods employed to keep digital currencies and the network secure.

Is Cryptocurrency Safe To Invest In?

Cryptocurrency investments are subject to market risks, but if sufficient security measures are not taken, trading accounts can be maliciously accessed. Investments come with risks and uncertainties, and we cannot claim that any digital currency investment is risk-free. Buying and selling cryptocurrencies can be risky even if the trader is knowledgeable about the market and treats their coins carefully.

What Is Cryptocurrency?

A cryptocurrency is a digital currency secured by encryption, due to which chances of activities such as counterfeiting and double-spending taking place get close to impossible. Cryptocurrencies get created on blockchain technology ( a distributed ledger enforced by a distributed network of computers). Cryptocurrencies are unique in that they do not get issued by any central authority. The term "cryptocurrency" comes from the encryption techniques used to keep digital currencies and the network safe.

Is Mining Cryptocurrency Legal?

Cryptocurrency mining can be time-consuming, expensive, and sporadically profitable. Mining has an appeal for many cryptocurrency enthusiasts as miners are paid directly with crypto tokens for their efforts. The legality of cryptocurrency mining is dependent on where you live. In India, there is no restriction on crypto mining.

Are Cryptocurrencies A Good Investment?

Cryptocurrency has the potential to make you extremely wealthy, and the potential to cause you to lose your money. Crypto assets, like any other investment, come with many risks and potential rewards. Fundamentally, cryptocurrency is an excellent investment, particularly if you want to gain direct exposure to the demand for digital currency.

What Is Virtual Currency?

Virtual currency is a type of uncontrolled digital currency that can only be used online. It is exclusively stored and transacted using designated software, mobile or computer applications, or unique digital wallets, and all transactions are conducted through secure, dedicated networks. Because digital currency is just currency issued by a bank in digital form, virtual currency is not the same as a digital currency. Virtual currency, unlike ordinary money, is based on a trust structure and cannot be issued by a central bank or other banking regulatory organization.

Disclaimer: Cryptocurrency is not a legal tender and is currently unregulated. Kindly ensure that you undertake sufficient risk assessment when trading cryptocurrencies as they are often subject to high price volatility. The information provided in this section doesn't represent any investment advice or WazirX's official position. WazirX reserves the right in its sole discretion to amend or change this blog post at any time and for any reasons without prior notice.
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