If all goes according to plan, the switch from Ethereum to an environmentally friendly blockchain capable of scaling much higher than it would take to make it a viable payment gateway will take place on September 10 . 19.
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That’s when, if all goes according to plan, he doesn’t. 2 blockchain will undergo the “merge,” shifting from the current bitcoin-style consensus mechanism that requires as much power as entire countries to an environmentally friendly proof-of-stake (pos) process that will keep you safe while new blocks are added. transactions. to the blockchain with virtually no noticeable carbon footprint.
Reading: Ethereum 2.0 transactions per second
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Seven years in the making, the new ethereum 2.0 will see the leading smart contract platform become capable of scaling to 100,000 transactions per second (tps) with a 12-second “block time” that will give it finality of the transaction in approximately 6 minutes.
read more: ethereum 2.0 will not be faster, said vitalik buterin. but it will continue to scale massively
The merger comes as all existing applications on ethereum, including most of decentralized finance (defi), as well as most blockchain-based projects such as supply chain management and cross-border payments, will be transferred to the pos ethereum 2.0 blockchain.
All of these applications are based on the use of self-executing smart contracts, which are the primary mechanism behind every use of blockchain other than as a direct payment currency.
see more: defi series: what is a smart contract?
the move to ethereum 2.0 is becoming increasingly important for the cryptocurrency industry in general, as concerns about the staggering pollution caused by bitcoin and ethereum threaten all technology and major investors and corporations are increasingly increasingly disenchanted by the biggest achilles heel of blockchain.
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while warning that sept. the 19th is not a firm date, the projection of the main developer of ethereum, tim beiko, is the first time that a merger date has been given, beyond a timeline of months or quarters. Ether price spiked 45% over the weekend on the news.
a true payment solution
For the payment industry, however, Sept. 19 is not the key date. that’s projected for Q1 2023, with the introduction of “sharding” technology in ethereum 2.0, which is essentially the ability to divide the network into pieces.
This promises to vastly increase the speed and number of transactions the blockchain can process and dramatically reduce transaction fees which can range from several dollars to over $100, though in recent weeks it has fallen slightly below $1 for the first time in several years.
In the meantime, however, making transactions faster and cheaper will still require the use of layer 2 solutions like polygon, which creates a second blockchain on top of the ethereum network where transactions take place. transactions, and only finalized data is moved to ethereum proper to be added to the immutable blockchain.
read more: blockchain basics series: what is a polygon? an ethereum killer hedges his bets
Works in the same way as bitcoin’s lightning network, which payment processors are rapidly adopting, such as the block and stripe cash app, as they implement affordable and scalable payments.
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While there have been concerns that pos is not as secure as pow mining, it shouldn’t be a problem for ethereum 2.0. This is because security concerns are a factor in how many “validators” pos networks have to ensure transactions are real and fairly added to a blockchain. they place bets, essentially bonuses, that can be garnished by smart contracts for misbehavior.
While some have fewer than a dozen, Ethereum 2.0 requires a minimum of over 16,000 and currently has nearly 350,000 in pre-merger testnets. Some $35 billion has been staked on Ethereum 2.0.
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