Part 3: The Blockchain Wars
Will Ethereum 2.0 make Polygon redundant?
The mood has been set. It’s showtime now. The story that started as a romance between Ether and Poly is now the story of a war.
A war between two Blockchain giants. One revolutionized the industry and the other took advantage of its weaknesses. And now, they are pitched against each other. Who will win?
Hold on!
How did we come to this?
Let’s rewind a bit.
Ethereum was the aspirational kid who set out to change the world with its Blockchain technology. But, as it was moving ahead, it left behind a trail of problems (catch up here). And, in came Polygon to help Ethereum (here’s how if you missed it).
But now, Ethereum is all set to solve its problems with a set of solutions. And, this solution is standing face-to-face with Polygon, looking at it in the eye with the only desire to win.
Enter: Ethereum 2.0
Yes. Ethereum is upgrading its full-of-problems version to a smooth-and-hassle-free version! It plans to be more scalable, more secure and more sustainable.
Well, the whole Blockchain cannot just be replaced by a better version overnight. The changes are going to happen gradually, in “phases”, solving one problem at a time.
The Ethereum Blockchain is decentralised. There is no central authority to process or supervise transactions on the network. Anyone and everyone can contribute to this network. With hundreds of thousands of participants continuously processing transactions every second, how does one assure that all these transactions are authentic and verified?
A consensus mechanism. This mechanism is a set of rules used to verify the transactions on the Blockchain network.
Ethereum uses the mechanism of Proof of Work. The miners have to show “proof” that they did some “work”. What work? Verifying the transaction. And, how do they do that?
The miners verify a new transaction by solving complex cryptographic algorithms on their machines. Once the cryptographic algorithm has been solved, the transaction gets verified and is added to the Blockchain, and the miner gets a transaction fee (GAS fee) as a reward for his efforts.
“Sounds interesting. So, can I verify transactions and earn Ether?”
Well, yes. Only if you have sophisticated, highly-efficient hardware with high computational power.
And, high computational power = high electricity consumption.
Congratulations! You've earned some Ether at the cost of the environment.
Well, Ethereum realised the harm it was causing to the environment (48.37 TWh electrical energy annually), and decided to mend its ways. How?
Enter: Beacon Chain
This Beacon Chain does not change much, except introducing a more sustainable consensus mechanism called “Proof-of-Stake”. Now, instead of solving complex algorithms, the users are required to “stake” an amount of their tokens to have a chance of being selected to validate blocks of transactions and get rewarded for doing so. Now, you do not need a high computational power; you need a higher stake to stand a higher chance of getting selected.
Hitting two birds with one stone, the Blockchain network becomes environmentally sustainable and more secure. Secure how, you ask?
Well, if you were to lose your stake when you tamper with the Blockchain, would you even try doing it?
And, if more people can now participate in the verification process by simply staking their tokens, don’t you think the network’s decentralisation will also increase?
But, hey. This is just the first step. The Beacon Chain does not allow smart contracts and dApps to be built. This chain right now is not even connected to the main Ethereum chain, and runs separately (on Proof-of-Stake).
What should be the next step then?
Yes. Connect the Beacon Chain to the main chain.
Once this “merge” is done successfully, the whole network will operate on Proof-of-Stake, and Ethereum can officially say goodbye to Proof-of-Work.
Here’s how Ethereum defines its merging process -
“Imagine Ethereum is a spaceship that isn’t quite ready for an interstellar voyage. With the Beacon Chain, the community has built a new engine and a hardened hull. When it’s time, the current ship will dock with this new system, merging into one ship, ready to put in some serious light years and take on the universe.”
The main Ethereum chain will bring in the ability to operate smart contracts and dApps, and the Beacon Chain will bring in Proof-of-Stake. Voilà! Once they become one and the same, you have a system with the best of both worlds!
Step 3: Shard Chains
Eh, what?
Let’s say you have a never-ending to-do list for the week. Looking at it might be overwhelming. After all, how are you going to complete all those tasks in a week?! Just one more to-do and you’re ready for a breakdown! Hold on, breathe. What if you could break this week-long list into days? That would be manageable, huh? And, oh, the mental relief!
That’s what the techies call “Sharding”. A “shard” is a “part of the whole”, and sharding is simply breaking down something into smaller chunks. How does it help?
With a daily to-do list, you can stop thinking about the hundred pending tasks for the week, and start focusing on them, one day at a time. And, at a faster pace!
Speed: Check ✔
Efficiency: Check ✔
This is also what Ethereum is planning to do. Technically speaking, Sharding breaks down a database (the Blockchain) to spread the workload. With Shard chains, the Ethereum network can manage the huge traffic without congestion.
Scalability: Solved ✔
With newly introduced Shard Chains, the validators (people who validate or verify transactions) will just have to store data belonging to the particular shard that they are validating. And, if the work required to be done reduces, the overall network speed increases, right?
Ethereum claims that Sharding might eventually allow you to run the Blockchain on your personal laptop or even your phone!
Hey, wait. Looks like Ethereum just took a page out of Polygon’s book! (Well, who are we kidding, didn’t they take the entire book? Beacon Chain and Shard Chain sound eerily similar to Polygon's ways!)
Polygon brought in a group of friends, to share Ethereum's workload. The main Ethereum chain could delegate transactions to these friends, or "side-chains", and with all of them working together, the overall speed increases.
Ethereum is coming up with a similar solution, called "Rollups". It has also made some friends that are willing to share the main chain's workload.
Okay, how do the friends talk to the leader here?
Simple. They assign one of the friends to collect all the work, and present it to the leader. Technically, transactions can be "rolled up" into a single transaction, and reach the main chain.
Now. The individual friends don't really have to care about what the others are doing, right? They just complete their share of work. And, what happens with lesser work?
That’s right. Speed. Upto almost 1,00,000 transactions per second!
Again a trade-off. Speed against dApps and smart contracts. The Shard Chains will not be able to execute smart contracts and dApps.
Well, these are just “plans”. Mere ideas. Only the Beacon Chain is in action as we write this. The next steps are likely to take place in ~2021-22.
Also, do you see what Ethereum plans to do? It is trying reaally hard to come at the top by becoming more scalable, secure and sustainable. But none of its solutions can exist independently for the lack of dApps and smart contracts. And well, what is a Blockchain without dApps and smart contracts. Thus, they need to be merged with Ethereum to realize the full potential of its dreams!
So, are the efforts really worth it, if they can’t merge the solution with the problems? Or, the side course with the main course?
Well, this upgradation is set to be achieved within the next 2 years.
Yes. 2 years.
Looking at the pace of things in the Blockchain Technology space, won’t this slow-and-steady approach of Ethereum leave it behind in this race?
Plus, we have Polygon, standing tall, already having implemented all that Ethereum “plans” to achieve. But, how long will it take for Polygon to expand to other Blockchain networks?
Will this temporary dependence on Ethereum bring down Polygon, or will Polygon become self-sustainable, win this war and bleed Ethereum to death? (Tweet this)
Only time will tell.
Until then, read on.
This three part series has been created by the combined efforts of Pratibha, Daksh and Yavantika. They have put in countless sleepless nights to get this series to you. What do we ask in return? Tell your friends about us so that they can also get the latest scoop on WhatsApp every morning. Easy, eh?
Great efforts... hardwork of creators can be seen clearly in the whole series...
Thanks team ReadOn