By CNBCTV18.com IST (Published)
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The much-anticipated Ethereum merge went ahead last week without incident. It was a momentous event as the blockchain switched from one way of running a blockchain, known as proof-of-work (PoW), to another, called proof-of-stake (PoS).
The much-anticipated Ethereum merge went ahead last week without incident. It was a momentous event as the blockchain switched from one way of running a blockchain, known as proof-of-work (PoW), to another, called proof-of-stake (PoS).
While there have been several test runs before the mainnet merge, there was still a slim chance that something could go wrong. This is especially considering the scale and extent of the transition. Justin Drake, a researcher at the Ethereum Foundation even compared the move to PoS to “switching out the engine from a running car.”
Fortunately, on September 15 at block 15,537,393, the Ethereum Merge was completed without hiccups, and the blockchain now boasts 99 percent lower power consumption. However, this is not the end of the line in terms of upgrades and updates for Ethereum.
There is a lot in store for the blockchain, with the bulk of user and performance-oriented improvements yet to come. Tag along as we unpack some of these upcoming ETH milestones and explain what they mean for network users.
The Shanghai update
This is perhaps the most anticipated event for all those who have staked ETH to earn a passive income. It will allow these individuals to unlock their tokens and withdraw the rewards accrued since they began staking. Until the Shanghai update occurs, these tokens and rewards will remain locked with the blockchain. The update is also expected to feature a queued withdrawal system to prevent a mass exodus of stakers.
The Shanghai update is predicted to go live in early 2023. Besides unlocking staked ETH and rewards, it will also introduce several other improvements, including measures to lower the notorious gas fees on Ethereum.
Sharding
Ethereum’s transition to proof-of-stake opens the door to a significant scaling update known as sharding. This is a multi-stage update that will improve the scalability and performance capacity of the blockchain.
In computer science terminology, sharding refers to the horizontal split of a database to spread the storage and processing load. In Ethereum’s case or any blockchain for that matter, it refers to the creation of sub-chains (shards) that will have their own nodes and processing power.
These sub-chains will process transactions independently and relay the information to the main chain. This divide and process method will reduce the load on the blockchain. Ethereum devs will implement sharding in two phases that should be completed between 2023 and 2024.
It is predicted to drastically improve throughput and lower gas fees. The official Ethereum blog post on sharding estimates that throughput will hit 100,000 transactions per second (TPS) post the update.
This is a towering improvement from the current 15-20 transactions per second that the network currently supports. This slow processing speed creates congestion and drives-up gas fees. Sharding will address both these problems, significantly optimising on-chain performance.
Reducing node data
Blockchains and their distributed ledger technology rack up tons of data over time. Therefore, after implementing the Shanghai and Sharding updates, Ethereum will move its focus to optimise data storage and purging historical network information.
To do this, Ethereum plans to introduce Verkle trees and stateless clients. These technical updates will allow participants to become validators without storing extensive amounts of data on their machines.
After implementing these updates, Ethereum also plans to eliminate its old network history. This will “simplify the Ethereum protocol” and reduce the “amount of space you need to have on your hard drive” as a node.
These updates were part of Vitalik Buterin’s talk at this year’s Ethereum Community Conference (ECC) in France. There are no set timelines for these updates, but “it will easily take 2-3 years,” according to Sameep Singhania, co-founder of QuickSwap, a decentralised exchange built on the Polygon network.
Conclusion
As per Buterin’s talk at ECC, Ethereum was only 40 percent complete, with plenty more updates expected after the merge. Therefore, the transition to proof-of-stake is merely the base on which these updates will be built and the best is yet to come.
