Purpose of Ethereum 2.0
The main goal of the Ethereum 2.0 update is to improve scalability so the network can process more transactions without lags or high fees.
While the full impact of the update will not be felt until it is fully rolled out, some of the potential use cases for Ethereum 2.0 include:
- Supporting the adoption of blockchain technology by large companies in private companies and companies;
- Creation of more decentralized autonomous organizations (DAOs) and governance models based on smart contracts and trusted interactions;
- Introducing Ethereum tokens, allowing new projects to raise funds and launch their own tokens on the Ethereum network;
- The further expansion of Nonfungible Tokens (NFTs) and other digital assets that can be stored on the Ethereum blockchain; and
- The improved support for decentralized finance (DeFi) platforms and DApps is expected to be widely embraced by crypto enthusiasts and the broader public.
In addition to these benefits, it is also likely that Ethereum 2.0 will enable a variety of new use cases not possible on the current network, such as:
- distribution of tokens representing ownership rights as a method of managing royalties in the music industry;
- Creating a decentralized AI (artificial intelligence) ecosystem that allows users to train and monetize their own machine learning models;
- facilitating secure and low-cost cross-border payments;
- Enable supply chain managers to track product delivery without fear of tampering;
- providing a decentralized gaming and prediction markets platform; and
- Increased privacy and the ability to store large amounts of data, which can be especially helpful for storing sensitive information like medical records and financial data.
While there is still time before the update is fully rolled out, the promised benefits are significant and could have a major impact on how businesses and individuals use blockchain technology in the future.
The popularity of the Ethereum platform
The popularity of the blockchain network is expected to increase once Ethereum 2.0 is released.
Ethereum 2.0 will bring greater scalability, security, and efficiency to businesses and individuals looking to take advantage of blockchain technology. Ethereum is currently one of the most popular cryptocurrencies alongside Bitcoin (BTC), with almost 4 million wallets actively holding ETH (as of February 2022).
Blockchain continues to be where most DeFi and NFT activity takes place, with new DApps and projects being launched on the platform every day. According to analysts, Ethereum currently has 70% of all DeFi transactions in the cryptocurrency market and its blockchain is used to support most NFT and gaming projects.
The number of transactions on the Ethereum network
The average number of transactions on the Ethereum network is currently 1.1 to 1.5 million transactions per day.
These numbers are expected to increase exponentially after the launch of Ethereum 2.0 as it will allow significantly more transactions to be processed per day. Currently, the network can only process 15 transactions per second.
Ethereum 2.0 aims to increase this exponentially to around 150,000 by the time the upgrades are fully rolled out. If this becomes a reality, Ethereum will undoubtedly become one of the fastest and most scalable blockchains in existence, which should further increase its popularity.
Addressing concerns about scalability and high gas costs with Ethereum 2.0
Scalability has always been one of Ethereum’s biggest challenges. This is especially true for developers looking to build DApps and DeFi platforms on top of the blockchain, as transaction costs can be prohibitively high.
However, with the arrival of Ethereum 2.0 (which introduces a new PoS consensus mechanism and shard chains), it will finally be possible to scale the network in a way that significantly reduces costs and enables faster transactions:
Tips and Tricks to Spend Less Gas Fees on Ethereum
There are several ways you can reduce or even eliminate these costs when spending gas fees on Ethereum.
- Use wallets that support batching: Batching is a feature offered by some wallets that allows you to group multiple transactions into one, reducing the amount of gas you have to spend.
- Use ERC20 tokens: ERC20 tokens are digital assets running on the Ethereum blockchain that can be used instead of ETH when paying for gas. This is because they often have much lower transaction fees than ETH itself.
- Use a Gas Price Calculator: Gas prices often fluctuate, so it’s important to use a gas price calculator to ensure you get the best possible price for your transaction.
- Use a gas tracker: A gas tracker is a tool that allows you to monitor the current gas prices on the Ethereum network in real time. This way you can make sure you are always up to date with the latest prices.
- Use a gas station: A gas station is a website where you can compare gas prices from different ETH wallets to find the best one for your needs.
By following these tips, you can significantly reduce the amount of money you spend on gas when using Ethereum. This will help make it more affordable for you to use the network and participate in DeFi and other activities until Ethereum 2.0 is fully launched.