Shanghai Upgrade for Ethereum: That has changed and so it goes on

Forex in this article

• PoS makes Ethereum greener and more efficient
• Thanks to Shanghai Fork, validators can freely dispose of their tokens
• Numerous other improvements to the Ethereum blockchain planned

2022 was a particularly exciting year for Ethereum, because the ETH merger made the Ethereum blockchain more efficient. On September 15, 2022, the previously used Proof-of-Work (PoW) algorithm was replaced by the Proof-of-Stake (PoS) method. This not only improved the speed of the network, but also reduced the energy requirement enormously.

This also meant the end of the lucrative Ethereum mining, because while the originally used PoW method was used to verify the blocks anchored in the blockchain, mainframe computers solved complicated number puzzles and their operators provided new ETH coins to provide the computing power were rewarded, PoS will now randomly select users who have a certain amount of ETH coins to validate the next block in the chain.

What will change with the Shanghai Fork

Ethereum users who wanted to participate in the blockchain as validators had to spend 32 of their ETH tokens, which were firmly anchored in the blockchain, in return for which the crypto users received new ethers as a kind of return. This type of participation in the blockchain is called staking. So far, however, this has had the disadvantage that Ethereum stakers have not been able to withdraw their staked tokens or their crypto reward. This is exactly what has now changed with the Shanghai fork, meaning that validators now have the opportunity to freely determine their staked ETH tokens as well as their reward. This applies not only to validators from the very beginning, but to any user who decides to stake their ether.

How is the development going now?

The Ethereum network is constantly evolving. Programmers can submit proposals for this (Ethereum Improvement Proposals – EIP). According to Coindesk, EIP-4844, a first prototype for Dankharding, is expected to be tested in Q3 2023. Danksharding is the Ethereum-specific sharding scheme and is intended to greatly simplify the handling of transaction data by validators. Above all, EIP-4844 is intended to reduce transaction fees (the so-called gas fees) in the network without decentralization suffering as a result.

Also planned is zk-SNARKs, which is working on so-called zero-knowledge proofs to improve privacy. Until now, blockchains have been completely open and transparent by nature. In contrast, with zero-knowledge proofs in a transaction, each party is able to verify to each other that they have a certain set of information, but does not disclose what that information is. This differs significantly from other systems where at least one party needs to know all the information.

Vitalik Buterin’s Ethereum roadmap

In November, Ethereum co-founder Vitalik Buterin tweeted the roadmap for the further development of the world’s second largest cryptocurrency. Planned are upgrades with the names “Surge”, “Verge”, “Purge” and “Splurge”. According to him, once all phases of the roadmap are completed, Ethereum will be able to process 100,000 transactions per second.

Updated roadmap diagram! pic.twitter.com/MT9BKgYcJH

– vitalik.eth (@VitalikButerin) November 4, 2022

After switching to the PoS network on September 15th, Ethereum is now in the “surge” phase ” (German: “rise”). The so-called sharding mechanism and side chains are implemented here to increase scalability. The The main goal of scalability is to increase transaction speed and transaction throughput (number of transactions per second) without sacrificing decentralization or security.

So-called “Verkle Trees” will then be introduced as part of the “Verge” upgrade. With this feature, the amount of data required for a “proof” (evidence of consensus) is significantly reduced. This should also help improve scalability. It should also help to save storage space and reduce the node size. Nodes are the computers that belong to the Ethereum blockchain network. They verify, store and create transactions on the blockchain.

This is followed by “Purge”, a phase during which old data is deleted to make room for new data and prevent network congestion.

Finally, as part of “Splurge”, the network operations are to be optimized and the previous upgrades are to be coordinated with one another.

Editorial office finanzen.net

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