Ethereum 2.0 phase 0 launches
The long-awaited launch of Ethereum 2.0 has begun. Its completion will also be long-awaited.
The Ethereum 2.0 launch process has begun.
This essentially means attaching proof of stake (PoS) training wheels to the proof of work (PoW) blockchain, riding along with them for a while and then, if all goes well over the next couple of years, dispensing with the PoW wheels and switching entirely to the PoS wheels.
The Ethereum community started attaching these training wheels on 4 November while everyone else was busy watching the US election.
This is the progress bar of people depositing ETH into the Eth 2.0 mainnet contract, at the time of writing. In essence, they're inflating the PoS training wheels.
PoS basically works by using money itself as the "weight" in the blockchain consensus mechanism. So for a PoS mechanism to function correctly, you need a critical mass of legitimately valuable cryptocurrency in the hands of enough different participants. In this case, that minimum critical mass required to properly test these training wheels under live conditions is 525,288 ETH (about US$230 million at current prices) in the hands of 16,384 different nodes.
That's what the progress bar is showing. People are filling it up by depositing funds into the Eth 2.0 deposit contract.
There are a couple of reasons why people are making deposits. The first is to contribute to Ethereum, because it's not every day you get to put training wheels on a spaceship. The second is to earn staking rewards, essentially interest on their ETH.
There are also several reasons why people aren't making deposits: it's complicated, it's risky and once your funds are in there, they're essentially locked away until the time comes to remove the training wheels.
If the progress bar gets filled up with the required amount of money and enough validators by 1 December, that's when it will launch. If it's not full by then, it will instead just launch whenever it happens to get filled up.
So far, that's the only clear timeframe around any of this. Everything else happens when it happens, although it's expected to take a couple of years to completely transition and take off the training wheels.
This transition to PoS is a good deal more complicated than just launching a fresh PoS network, because Ethereum is a live, functioning network used by thousands of people and securing billions of dollars. Nothing quite like this has ever been done before, so it's not really the kind of thing you want to set concrete timelines for.
The process will be done in several phases, each proceeding once the previous is complete. We're currently in phase 0, which is all about the PoS consensus and tracking the validators and their balances.
Phase 1 will then add the ability to handle data associated with the PoS network, phase 1.5 will swap the training wheels in for the old wheels and phase 2 will polish off the rest of it to turn Ethereum into a fully functional PoS network. Somewhere at an undetermined place in the future it will all make a very nice video montage.
Disclosure: The author owns a range of cryptocurrencies including at the time of writing