#cryptocurrency Archives

NFT – A Comprehensive Overview

Posted on 01/06/202104/06/2021 by Anteelo Master

Being tech-savvy and digitally social-friendly, we share many memes, infographics, jokes, artwork, and other digital assets with our peers and family either for the purpose of entertainment, to gain information, or to make the public aware of some event.

But have you ever wondered, who is the creator of those assets or where is the real origin of that digital property? The answer to these debriefs lies in NFT.

It all started in 2017 when the first-ever Non-fungible token was released named Crypto Punks on the American Studio Larva Lab’s Ethereum Blockchain. It was a two-person team back then which consisted of John Watkinson and Matt Hall. In the same year, another project was released named Crypto Kitties that went viral immediately after its arrival. It’s said to generate an investment of a whopping $12.5 million.

In this article, we will dive into non-fungible tokens and how did it start along with its popularity among masses, how to create non fungible tokens, characteristics that make NFT different, its benefits, risks and the upcoming future.

What is NFT

Fungible assets or fungibility denotes an item or an asset that has the ability to trade or get exchanged with a similar type of asset or good, whereas non-fungible assets tokens are unique digital assets whose ownership can be tracked on a blockchain development like Ethereum.

Non-Fungible Tokens aka the NFTs are digital assets or a type of digital certificate for owning goods or an asset that represents a great variety of intangible and tangible items such as paintings, virtual real estate, postcards, videos, and so on. NFTs cannot be replicated or equated with an asset that is similar, because every NFT asset is unique on its own.

To make things more clear to you, let’s take an example of a game ticket. If you give someone a baseball game ticket, then obviously you would take the baseball game ticket. Right? If that someone returns you a movie ticket, will you accept it?

The answer: No, you will not, because a movie ticket will not be as equally valuable as a baseball game ticket. If we place this example in place of NFT, then the game ticket (which is an NFT) cannot be replaced or traded with any ticket, as every baseball game ticket has its own unique identity.

The same is the case with NFT, where you cannot just exchange or trade NFT tokens with similar value tokens, as each token is different from one another and has its own uniqueness and rarity.

Non-fungible Tokens Examples

Owning a digital collectible has its benefits over a physical collectible like a stamp or rare coin. Each NFT consists of distinguishable information that makes it unique from other NFTs and makes the verification of authenticity for a collectible easier.

Like, for an artist, it makes the circulation of fake collectibles useless because the original item can be easily traced back to its legal user. Also, in comparison to other cryptocurrencies, you can’t exchange NFTs directly with anyone and the reason is the same – they’re all non-identical/dissimilar. For example, if you’ve got two NFCs on a single platform, they still won’t be the same despite being a part of the collection or having the same size and color. Let us see some examples of NFT Projects:

Blockchain Heroes– It is an original trading card series highlighting the similarities between personalities in the crypto and blockchain space.

Decentraland– In this game the players are allowed to buy the virtual world owned by the users. The owner of the virtual space can monetize their world with shops, advertising, etc.

Prospectors.io– It is a blockchain-based game, where the owned assets by the players are given to them in form of blockchain, and players earn NFT based on their gameplay.

Gods unchained– It is a digital collectible card game or online collectible card game, where the cards are in the form of NFTs that can be freely bought and sold.

CryptoKitties– It is a famous NFT game that includes breeding and collecting cats. These digital cats took NFTs to the mainstream with each token having distinctive ”cattributes”.

The History of NFT – How and Why Did it Start?

There are some arguments around the first appearance of NFTs. Colored coins are speculated to be the first NFTs to exist. Colored coins are depictions of real-world assets on the blockchain.

The mention of Colored Coins originated from a blog post in early 2012 by Yoni Assia, titled “bitcoin 2.X (aka Colored Bitcoin) — initial specs.” It is said that Colored Coins supported experimentation and laid the groundwork for NFTs.

Then came the trading of Rare Pepes on Ethereum and after this finally the first-ever Non-Fungible Token was released named Crypto Punks.

Afterward, a company named Rare Bits emerged as a marketplace and exchange portal for NFTs and raised $6 million in investment. The ideology of NFTs made possible a collectible card game that’s known as Gamedex nowadays and raised more than $800,000 in the initial days itself. Presently, a digital artist in America named Beeple launched his work named “Every day. The First 5000 Days”, which got sold for $69 million (42329.453 ETH). It’s one of the first artworks with NFT to be listed in some of the most important auction houses.

Additionally, in a recent deal, NBA and Dapper Labs launched the beta version of NBA TopShot Collectible and Tradable NFT-based apps in partnership. They’ve been working on this since 2018 and launched it in the first half of 2020. The collectible contains tokens with data and multimedia smashed together in the form of packs.

Reason Behind NFT’s Sudden Popularity

Throughout time, the NFTs are used across numerous industries and today they’re known commonly as Ethereum Tokens based on ERC-721. Several amazing features make NFTs popular these days:

The complete data of NFT is stored securely in Blockchain which means the tokens can never be removed, destroyed, or replicated no matter what.
The main source of value for NFTs is their scarcity. Although NFT developers can make an infinite number of tokens, they’re kept limited purposefully to maintain their value.
NFTs are entirely indivisible which means they can’t be divided like Bitcoins into smaller denominations.
With the capabilities of Blockchain, NFTs can be easily tracked back to their real owner and eradicates the need for third-party verification forever

*Fun Fact* Bitcoins are completely fungible and can be traded while maintaining a standard value even after the exchange. NFTs cannot be directly exchanged with anyone else unlike regular cryptocurrencies such as Monero, Ethereum, and Bitcoin.

Distant Characteristics of NFTs – What Does it Include?

1. Non-Interoperable

As NFTs follow the standard ERC-721, they’re considered to be non-interoperable which means the information stored in them can’t be exchanged or used in any manner.

2. Rare

Presently, the total number of NFTs is very less in the world and they’re very scarce. This not only makes them rare but also makes their value high. In simple terms, the lesser the number of NFs, the pricier they’ll be.

3. Indestructible

The NFTs are stored and managed through Blockchain that results in a greater level of security for them. This means they can never be destroyed or removed at any cost.

4. Indivisible

You can’t send a portion of non-fungible tokens to anyone (unlike other cryptocurrencies) because they’re non-fungible and don’t have a defined value. For instance, one bitcoin will possess the same value after transfer but NFT won’t.

5. Unique

Resonating with real artwork, NFTs use blockchain to stay apart from the crowd and determine the authenticity of a state of art. It also allows you to distinguish original items from their replicated copies.

The Working Methodology of NFTs

NFTs are unique crypto tokens that are managed on a blockchain. Thus, blockchain acts as the decentralized ledger that traces the ownership and transaction history of each NFT, which has a code and a unique ID, and other metadata that no other token can duplicate.

The process of creating NFTs can be done through contract-enabled blockchains with the help of appropriate tools and support. Ethereum was one of the first widely used EOS, NEO, and now it also includes NFT standards. The tokens along with their smart contracts allow adding detailed information such as the owner’s identity and so on.

This process provides NFTs the attributes of scarcity and royalties that make it attractive when coupled with digital media:

Scarcity

When we talk about scarcity, we mean that the owner gets to decide the scarcity of their assets. For example, if we take an example of a ticket to any sporting event or a concert, then there the owner decides how many tickets to be sold. Same way in NFT, the creator can decide how many replicas should be there. So these replicas are there with a slight difference to each one of them.

In another example, the owner can create NFT token only one, making it a special rare collectible. In any case, each of the NFT will have its own unique identity, such as a bar code on every cloth or ticket that looks similar to each other but is uniquely different.

Royalties

NFTs are coded with software code (called smart contracts) that governs the prospects such as verifying the ownership and managing the transferability of the NFTs. Also, NFTs can get programmed beyond the basics of ownership and transferability like any software application that incorporates a variety of applications and functionality (which also involves the linking of NFT to other digital assets).

For example, a smart contract could be created in such a way that some NFTs automatically allocate a share of the amount paid for any sale of the NFT, that is pay the royalties to the original owner.

When somebody creates an NFT, they are composing the smart agreement code that administers the NFT’s characteristics, which are added to the blockchain where the NFT is managed. Numerous blockchains can be used to handle NFTs, including Ethereum (with its established ERC-721 and ERC-1155 smart contract principles), Flowchain, and Wax, all of which make use of similar processes. Prominently, certain NFT marketplaces function with certain blockchains, thus the choice of blockchain to be used for NFT can have real implications for the seller, if not taken proper decisions.

Non-fungible Tokens Use Cases Across Multiple Industries

1. Gaming

Majority of the games have their virtual currency within their ecosystem that helps users make their progress easier. With that said, accounts with numerous purchased commodities have a great demand in an ever-expanding unregulated market. The different uses of NFTs will allow players to easily trade in-game collectibles with proper validation and security.

2. Digital Assets

For digital assets like house plans, mock-ups, themes, and domains, NFTs are certainly a perfect match. Moreover, digital real estate in games like Decentral Land is getting popular these days. They allow players to purchase and develop a set of spaces in a virtual world. The addition of NFT can make sure original creators can be traced back to these items.

3. Identity Theft

The things that represent identity and can be digitized such as medical records and academic qualifications can make use of NFTs to prevent identity theft. Furthermore, digital artists can also use it to convert their artworks and establish unique copyright for them. It also helps in separating counterfeits from the original.

4. Digital Collectibles

It’s a no-brainer that NFTs are rare and they find their major use in collectibles and art. With the addition of this token, the authenticity and ownership of a collectible or artwork can be easily verified. This also allows an artist to prevent their work from being misappropriated or pirated. NFT has already started to be used in cards and merchandise.

5. Identification and Certification

NFTs contain a unique set of information about an asset or a good programmed into them. This makes them a perfect match for issuing certificates, identities, qualifications, and licenses. The identification or certification can be issued directly through the blockchain as an NFT to make it traceable back to the source.

When the concepts of NFT are clear, we can clearly see the benefits of a blockchain of smart contracts that become a potent force for change.

Non-fungible Tokens Benefits

Ownership Rights

A non-fungible token can be utilized to address something extraordinary, both in the digital world and in reality. This has been utilized for collectibles and gaming in the digital world (demonstrating someone claims a particular CryptoKitty or item), yet it could similarly be applied to unique items in the real world – like houses, vehicles, craftsmanship, or potentially even personalities. It could likewise be utilized to allow specific access, giving access to Airbnb at specific occasions or for air travel tickets.

Customization Approach

Non-fungible tokens can be safely unlike other tokens that can’t be. Smart agreements/contracts and fungible tokens could possibly enact a portion of the functions of non-fungible tokens. However, in the non-fungible token market, all the information is held by the token itself.

The token can have additional information allocated to it which could incorporate standard options like the name and the ownership, but could be extended to areas like the history of the token and related data – an image of the house the token represents, the previous owners of a vehicle the token represents, or the count of character skins in a game with a similar model type the token represents.

Secure Trade

Generally, transferring the ownership of physical or digital items is at risk of fraud, and as such is either difficult in its execution or sometimes it is basically not permitted. With the security of blockchain and the uniqueness of non-fungible tokens, exchanging anything addressed by the token would be a much less complex and more effective process. As a token, it might actually permit the responsibility of ownership of items to be transferred across platforms or even be interoperable across various services like games or NFT marketplaces.

There is a mixed bag of characteristics when it comes to the characteristics of NFT. With every benefit there are risks that have to be taken into account to prove it.

Risks Associated With NFT

Valuations

Purchasing an NFT, similar to any collectible is a risky bet with its value going up. Unlike Blockchain asset tokenization trading cards or buying a real asset, NFTs are an up-and-coming market so there is no guarantee that there is going to be a similar kind of demand on digital assets.

If there is no demand for the NFT you buy, you could end up paying an enormous sum for something that decreases in value or is simply un-sellable. You could also make your own NFT however there is no assurance of a buyer which could lead you to waste your time and money.

Storage

Sales in NFT are recorded through blockchain technology, which demonstrates ownership. The real NFTs are made and stored through marketplaces and platforms like Open Sea or Rarible.

If by any chance these platforms get shut, there will be no assurance that you would have the option to access the work. This makes it less secure than having a physical art hanging on a wall or gaming tickets or trading cards that won’t just simply vanish.

Regulation

There is no regulation of NFTs so there is a lot of trust required. You need to believe that the NFT you are purchasing is a unique piece of art or work and hasn’t been replicated from somewhere else or you could face a copyright issue.

Also, if regulators and administrators get concerned regarding this thriving business, then there could be crackdowns on platforms and limitations on how much collectors can contribute. This could lead to decreasing the NFT token market value.

Hot Potato Effect

NFT games can have a ”hot potato” effect. Meaning that the players buy an asset to sell it for a profit, but if the market collapses, it can lead to a huge loss.

For example, you have a gaming sword and you are longing to sell it for a higher price than it was previously. Now the thing is, as long as someone is willing to buy, you will make a profit, but if there is no one to purchase the asset or if the market collapses, then you are at loss.

Future of NFTs

Whatever the risks, the future looks promising for NFTs as the total market for them crossed a whopping $100 million by the end of July 2020. Experts in the crypto industry even speculate that 40% of new crypto users will use NFTs as an entry point.

With the decentralized finance industry surpassing $4 billion in value, it is evident that the NFT space is set to grow exponentially in the days to come.

The Takeaway

You may have already figured out that it’s still in its early stage of development. Therefore, you can easily expect numerous cutting-edge platforms based on NFTs in the coming years.

Talking about the present, it’s transitioning from Crypto Kitties and gaming to digital identity, painting, and other use cases. This means that the market is still raw in terms of experimentation. For a new-age entrepreneur, this would mean a sea-full of opportunities to enter and rule the space in their sector. We are here to help. Share your NFT-based project idea with us.

Blockchain Technology: Significance

Posted on 26/04/202131/05/2021 by Anteelo Master

With the ever-evolving computer technologies, numerous things that once appeared to be outlandish turned into reality, for instance, online payments, internet shopping, and cryptographic forms of money. Secure online exchanges with no extra charges extraordinarily impact all the money related industry, and all this has been realised by virtue of Blockchain technology. Today, trendsetters in different fields understand the advantages of the innovation behind Blockchain. From the health industry to the stock market, numerous sectors are searching for approaches to coordinate Blockchain into their business.

Blockchain, with its decentralised and trustless nature, can prompt new chances and assist organisations through more prominent straightforwardness, upgraded security, and simpler detectability. In a Blockchain network, various modules/blocks contain information about business proceedings, exchanges, and agreements inside the framework in cryptographic structure. For instance, blocks may provide insights concerning a budgetary exchange, medicinal records, or in any event, even ballot results. All blocks are arranged in a chain and are interconnected, so as to make another block, the data of old blocks ought to be successively understood first.

In the event that you are working in the market, at that point, you should know the upsides of Blockchain innovation, i.e., its advantages. It will assist you with finding out about the up and coming changes if your business is as of now getting Blockchain or plan to actualise Blockchain later on. Let’s take a dive and explore the benefits of Blockchain:

1.“Trustless” System

In most conventional payment frameworks, exchanges are reliant on the two entities along with a mediator -, for example, a bank, Credit/Debit card provider, or payment gateway provider. Utilising Blockchain removes this compulsion on the grounds that the circulated system of nodes perform the exchanges through a procedure known as mining. Consequently, Blockchain is often alluded to as a ‘trustless’ framework. Thus, a Blockchain framework nullifies the danger of depending on a solitary association and decreases the general expenses and charges by removing mediators and outsiders.

2. Amplified Efficiency

Because of its decentralised nature, Blockchain evacuates the requirement for agents in numerous procedures for fields like payment gateways and properties. In contrast with customary budgetary services, Blockchain encourages quicker transactions by permitting P2P cross-border transactions with cryptocurrency. Real Estate Management procedures are made increasingly proficient with a merged arrangement of possession records, and keen agreements that would mechanize tenant-landlord agreements.

3. Dispersed Storage

As Blockchain technology stacks the information in various platforms on a dispersed network of nodes, the framework and the information are exceptionally impervious to errors and malware. Every single system node can copy and store a replica of the database, and consequently, there is no single probability of data loss: failure of a single node does not influence the accessibility or security of the system. Conversely, numerous traditional databases depend on one or a few servers and are highly defenceless against tech-failures and cyber-attacks.

4. Efficient Traceability

With the Blockchain record, each time trade of products is recorded on a Blockchain, a review trail is available to follow where the merchandise originated from. This not just assists in improve security and forestall misrepresentation in exchange-related organisations, yet it can likewise help confirm the genuineness of the exchanged resources. In markets such as drugs and pharmaceuticals, it tends to be utilized to follow the inventory network from maker to distributer, or in the handicrafts industry, to give an indisputable proof of possession.

5. Highly Stable

Affirmed blocked are highly improbable to be turned around, implying that once information has been enrolled into the Blockchain, it is extremely hard to expel or transform it. This makes Blockchain an extraordinary innovation for storing money related records or whatever information where a review trail is required on the grounds that each change is recorded and tracked. For instance, a business could utilise Blockchain innovation to avert fraud from its workers. In this situation, the Blockchain could give a protected and stable record of every single money related exchange that happens inside the organisation. This would make it a lot harder for a for anyone to make fraud in the records

6. Immense Transparency

The most prominent advantage of Blockchain is that it makes the transaction records immensely transparent. As Blockchain can be classified as a distributed ledger, every individual included in the network has access of the same record contrasting to individual copies. That common variant must be refreshed through accord, which implies everybody must concur on it. To change a solitary exchange record would require the modification of every single subsequent record and the plot of the whole system. Therefore, information on a Blockchain is progressively exact, steady and straightforward than when it is pushed through paper-substantial procedures. It is likewise accessible to all members who have permission for the same

7. Reduced Costs

For most organizations, cost-cutting is a crucial need. With Blockchain, you don’t require the same number of third-parties or go-betweens to safeguard processes because it doesn’t make a difference whether you believe on your exchanging accomplice or not. Rather, you simply need to confide in the information on the Blockchain. You likewise won’t need to audit such a great amount of documentation to finish an exchange since everybody will have permissioned access to a solitary, changeless variant.

8. Robust Security

Blockchain is unquestionably more secure than other record-keeping frameworks in light of the fact that each new exchange is encoded and connected to the past exchange. Blockchain, as the name proposes, is shaped by a system of computers meeting up to affirm a ‘block’ which is then added to a record or ledger, which frames a ‘chain’. Blockchain is shaped by a muddled string of scientific numbers and is cannot be changed once framed. This changeless and morally sound nature of Blockchain makes it safe from distorted data and hacks. It’s decentralised nature likewise gives it a one of a kind nature of being ‘trustless’ – implying that gatherings needn’t bother with trust to execute securely.

CONCLUSION

Blockchain innovation exhibits some remarkable focal points, and it is unquestionably digging in for the long haul. Blockchain is a progressive innovation with a tremendous effect on each industry out there. Our emphasis was uniquely on the primary divisions so you can relate and comprehend its points of interest. Permitting advanced data to be distributed, but not be duplicated, the Blockchain innovation made the establishment of a novel Internet. The system was initially created for digital money — Bitcoin — however, the specialised network is at present searching for other potential utilisation of this innovation. We, despite everything, have a long way to go for standard reception, yet numerous ventures are finding a good pace with the Blockchain frameworks. The following few years will probably observe organisations and governments exploring different avenues regarding new applications to discover where Blockchain innovation can be the most beneficial. We trust that at this point, you have comprehended the significance of the Blockchain.

How Does the Price of Cryptocurrency Change in the Market?

Posted on 18/02/201921/06/2021 by Tushar

If we had to make a list of some of the top volatile elements of the world, the one name that would top even Mercury is Cryptocurrencies.

Ever since their launch in 2009, cryptocurrencies have found themselves being counted as one of the most fluctuating and volatile topics of the world seeking to get to the bottom of what is cryptocurrency.

There is hardly any investment enthusiast who has not tried to crack the code of why cryptocurrencies fluctuate and how to take that understanding and convert it into insights that would make the investment successful.

While the industry has managed to make itself one that is extremely difficult to gauge in terms of cryptocurrency price movement, let us try to decipher how the price of cryptocurrency changes in the market by understanding how and why the cryptocurrencies move.

But let us first start by drawing parallels between Cryptocurrencies and Fiat Money.

Cryptocurrency vs Fiat Currency: How the Two Compare Against Each Other

The biggest comparative factor that stands between the cryptocurrency vs fiat currency debate is their backing. The fiat currencies are backed by the central governments and its value are derived from the fact that central government states it has value and then the parties transacting in the value are putting their trust in them. In the case of fiat currency, central banks control the entire supply of money and thus inflation.

Cryptocurrencies, on the other side, was brought into existence to not let central government have the autonomy to regulate the funds of an individual. And because they have a fixed supply, the devaluation through inflation is next to nonexistent.

Apart from this, both cryptocurrency and fiat currency come with similar characteristics: they both can be used as the medium to exchange services and products and they can store value.

Why Does Cryptocurrency Prices Fluctuate So Much?

A single statement answer to the question of what drives cryptocurrency price movement would be – because it is still a nascent stage.

Being a market that is yet to find its set of logical use cases, cryptocurrencies are still at a very nascent stage. And the result of this newness is the high volatility in the industry, which is majorly driven by the heightened experiments that investors make to get a sense of how the prices fluctuate.

Factors That Affect The Changing Cryptocurrency Values

The factors affecting price of cryptocurrency could range from the scope of cryptocurrency application in the present day to the future uses of cryptocurrency coin and a series of other linked elements falling in the development of the cryptocurrency space. Here are some of those reasons that bring about a cryptocurrency price movement in the market

1. Utility of the Coins

Any sound Blockchain development company would tell you that a cryptocurrency should have a strong use case in order to incentivize people to hold the coins.

Let us look at Ethereum as an example to explain it further. For executing the commands and developing applications on the Ethereum blockchain, one would need to have ETH to convert into gas and represent the ‘fuel’ of Ethereum.

Thus, the more the people who execute transactions and develop applications, the more would be the demand for ETH and greater would be the prices. In short, the bigger role of cryptocurrencies, the greater would be the cryptocurrency market cap.

2. Scarcity

Scarcity denotes the finite mechanism of cryptocurrencies.

In economics, a stable supply of any item increases its value in the long term for it is assumed that the demand would also increase. This, in turn, creates a scarcity for there are only a few coins in circulation. Some brands even use a burning mechanism, which means destroying a part of the coin supply. This in turn, increases the coin value for there is lesser coin supply.

3. Assumed Value

A cryptocurrency can only be as valuable as the market deem fit and the market values it on the basis of factors which are at the center of the project development. Here are some factors that determine the value of projects –

One that constantly achieve the milestones mentioned in its whitepaper
Partnership and collaboration with credible companies
Launch of MVP or beta version
The growth of the cryptocurrency market

4. Deflation of Fiat Currency

When the price of fiat currency declines, the price of cryptocurrency would automatically go up with respect to that currency. This happens because you would be able to get more currencies with your cryptocurrencies.

5. Mass Adoption

Driven by the sentiment that the more a product is demand, the greater would be its cost, the cryptocurrency price movement goes up with greater adoption that it sees in the market. This one formula has been the core reason behind the rise in prices of Bitcoin. So the more use cases a coin will see (like in case of Bitcoin) the greater would be its overall cost.

6. Whales

As the term denotes, Whales are those Bitcoin wallets that have around $1 billion in them. They make it very difficult to put any price target on the cryptocurrency. Per Wimmer, the founder of Wimmer Financial LLP, explains: “The crypto market is dominated mainly by ten big whales or privates. They are massive in the market and take up a lot space and volume so if you take the top 10 or even 50 you will have a lot of the volume covered already. It is too easy to manipulate the market so far”.

One way these ‘whales’ fuel price manipulations is through the rinse and repeat trading technique. Under this approach, a whale carrying huge crypto holdings begins selling them at lower than the market rate, which in turn causes a panic situation where small-time traders start selling off their holdings. The whale, meanwhile, waits through the panic state till the cryptocurrency value reaches rock bottom. And just when the price is low, they swoop in and buy more cryptocurrencies.

Besides these factors, if there is one thing that is and would continue to affect the cryptocurrency price fluctuations greatly is the regulations’ set. Presently, the speed at which governments are passing out regulations are limited to a huge extent, thus keeping cryptocurrencies reaching their mass adoption potential. But the more regulations, the greater would be the adoption and thus the rise in cryptocurrency prices.

The Roadmap to a More Scalable Ethereum Experience (Ethereum 2.0)

Posted on 09/02/201919/06/2021 by Tushar

Ethereum 1.0 is getting upgraded.
Ethereum 2.0 is going to be the new face of App industry because of its speed, scalability, cost-effectiveness, and other such benefits.
Ethereum 2.0 will be ready within 18-24 months, in the form of 7 different phases.
Ethereum 2.0 Phase 0 is expected to be live this year.

Ever since Ethereum was launched back in 2015, the developers were having sky-high hopes from it. While Buterin and Co., the company behind the evolution of this blockchain-based distributed computing platform, made significant changes in its consensus model and scaling solutions, the developer’s demand for an integrated experience of all these changes was not yet fulfilled.

But this Monday, the history of the Ethereum platform changed. The company announced an OS upgrade, known as Ethereum 2.0 (Serenity) – a glance of which we are going to cover within the next 3 seconds.

Ethereum 2.0: What It Is

Ethereum 2.0, according to Van Loon, is a distinct Blockchain from the existing Ethereum Chain, where the hard fork of the current blockchain is not mandatory for proper functioning. Instead, the value in Ethereum 2.0 is transmitted from ‘Proof of Work’ chain through a one-way deposit Smart contract.

With this attended to, let’s have a look into the reason behind the idea of launching this upgrade, or better say, have a comparison of Ethereum 1.0 and Ethereum 2.0

Ethereum 2.0 vs Ethereum 1.0: What Everyone Ought to Know

When it comes to comparing the two OS versions, the reasons that come up as the igniting force behind the introduction of Ethereum 2.0 are the following challenges associated with current Ethereum:-

Scalability:- Ethereum was launched with an aim to be the world computer that manages all the financial transactions and host dApps and Smart contracts without being impractically slow. However, Ethereum 1.0 is not able to fulfill this requirement while operating with PoW (Proof-of-Work) algorithm – something that gives the scope of introducing other more scalability-friendly platforms in the many Blockchain guide meant for entrepreneurs.
Security:- Though not a major issue, the security level and considerations associated with Ethereum 1.0 are not advanced. They have to be improved, which is what Ethereum 2.0 is focusing upon.
A Solution for Difficulty Bomb:- The developers have been continually compelled to shift from PoW to PoS by slowing down the mining rewards. However, this is increasing the difficulty associated with the process, and in the absence of any solution, it has been resulting in a dead end. Ethereum 2.0, in this case, will come up as a solution for the dApp developers to make better applications.

Now as we are familiar with the secret behind launching Ethereum 2.0, let’s dig deeper into what includes in this upgrade and when it will be live.

Ethereum denotes a series of updates that will make Ethereum make better and faster by focusing on two prime goals:-

Introducing PoS (Proof of Stake) consensus mechanism that will eventually eradicate the need to invest in PoW (Proof of Work) mining.
Introducing Sharding which will boost speed and throughout of the ETH transactions.

Now, when talking about the series of updates, the Ethereum 2.0 is making the update live in different phases. An outcome of which is that the 7 phases of the evolution of Ethereum 2.0 is expected to hit the market – with the Phase 0 just gone live.

Wondering what these different phases are? What will be included in each phase and when are they supposed to be made available to developers? Let’s cover this in the next section of the blog.

Different Phases of Ethereum 2.0

Phase 0: PoS Beacon Chain

The Beacon Chain is a PoS-enabled chain that will run in parallel to Ethereum’s Proof of Work chain and enable a Blockchain app development company to reap the benefits of the network without investing their time and energy into the process of re-learning the parameters of the platform. It is estimated to enter the market this year itself.

Phase 1: Basic Sharding

In this phase, shard chains will work in sync with the Beacon chain. They will aid developers with higher transactional speed and instant output delivery in transactions, which will eventually upgrade the scalability.

Shard chains will be responsible for managing transactions and exchange of account data and will be live in the world in 2020.

Phase 2: EVM State Transition Functioning

Proposed to enter the market in 2020-2021, this phase of Ethereum 2.0 Serenity will be related to the advent of new EVM (Ethereum Virtual Machine) which will be upgraded via the eWASM (Ethereum Web Assembly). This new virtual machine is predicted to perform code execution more swiftly and effectively while supporting many more programming language.

Besides, this phase will also witness the introduction of better protocol standardization to enhance the network security.

Phase 3: Light Client State Protocol

The fourth phase of evolution of Ethereum 2.0 will begin in 2022 and will cover everything related to the improvement of network in terms of security, scalability, and decentralization.

Phase 4: Cross-shard Transactions

This phase will be basically related to mind mapping of the complete architecture and will be seen somewhere around 2022.

Phase 5: Tight Coupling with Main Chain Security

The sixth phase of Ethereum 2.0 Serenity will be associated with internally fork-free sharding and data availability proofs.

Phase 6: Super-Quadratic or Exponential Sharding

The last phase of Ethereum 2.0 (Serenity), which will go live by the end of the year 2022, will be related to managing recursive shards.

The process of evolution of Ethereum 2.0, with 7 seven phases is announced to be completed within 18-24 months. This implies we will be able to enjoy 100 times more scalable network by the year 2022 along with other facilities like transition of Ether tokens from old chain to new one.