New Topic
Click here to advertise on this slot

how does ethereum 2.0 decrease transaction fees?

avatar
2022-06-13 14:11:26 UTC
from my understanding ethereum 2.0 introduces proof of stake instead of proof of work. What I don't understand is how that reduces transaction fees? Wouldn't the block size still be limited? What changes ethereum is bringing to reduce transaction fees?
Created
avatar17d
Replies
1
avatar
2022-06-22 11:02:44 UTC
<p>Short answer: Sharding.</p><p>The long answer is that PoS enables so called sharding of the ethereum network, where there would be multiple parallel blockchains, all secured by the same PoS consensus system and fully interoperable. The first of these chains, the Beacon Chain, was shipped 1st of December, 2020, and its' purpose is to coordinate staking. In the second part of the ETH 2.0 upgrade, The Merge, the current mainnet will become a shard of the ETH 2.0 network. This will change its' consensus mechanism to PoS and will bring the end of ETH mining and is scheduled to happen at the end of this year. None of this improves scalability yet, but this enables the <strong>actual</strong> sharding to be activated in 2023. In the first phase of sharding, there would be 64 so-called data shards, which couldn't execute smart contracts or process transactions, but they could store data which mainchain smart contracts could access. This would supercharge the efficiency of rollups, since they don't need to execute lots of code, but need to store a <strong>lot</strong> of data. If this doesn't help with scalability enough, in the second phase of sharding some (or all) of the data shards would get the ability to process TXes and smart contracts. And no, the block size of the mainchain would not be increased.</p>