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The Latest Update on Ethereum 2.0

The forthcoming update of Ethereum 2.0 is drawing near. However, let's first explore the concept of Ethereum. Ethereum is widely recognized as the second most popular cryptocurrency, following Bitcoin. But Ethereum has ambitions beyond being a mere medium of exchange or a store of value. It describes itself as a decentralized computer network built on blockchain technology.

The Genesis of Ethereum

In late 2013, the co-founder of Bitcoin Magazine, Vitalik Buterin, introduced Ethereum through a whitepaper. His objective was to create decentralized applications. Buterin proposed that blockchain technology and Bitcoin could have applications beyond finance, emphasizing the need for a more powerful programming language to enable the storage of real-world assets like stocks and property.

In 2013, Buterin collaborated with eToro CEO Yoni Assia on the Colored Coins initiative, which outlined potential use cases for blockchain technology. However, disagreements about the project's direction led Buterin to suggest the creation of a new platform with a more robust scripting language. This platform eventually became Ethereum.

In January 2014, Ethereum was officially announced at the North American Bitcoin Conference in Miami. During the conference, key project funders Gavin Wood, Charles Hoskinson, and Anthony Di Iorio rented a house in Miami to fully grasp Ethereum's potential. Joseph Lubin later joined the team. The formal software development began in early 2014 under the name Ethereum Switzerland GmbH, a Swiss business entity.

The Formation of Ethereum Foundation

Following the initial development phase, the Ethereum Foundation, a Swiss non-profit foundation, was established. In July and August 2014, an online public crowd sale took place, allowing participants to purchase Ether, Ethereum's value token, using Bitcoin. Although Ethereum's technological advancements garnered praise, concerns arose regarding its security and scalability.

In 2016, an unidentified hacker stole $50 million worth of Ether, raising security concerns. This incident led to a split within the Ethereum community, resulting in two separate blockchains: Ethereum (ETH) and Ethereum Classic (ETC). Despite its volatility, Ethereum experienced remarkable growth in 2017, with its value surging by over 13,000%.

In January 2018, Ethereum became the second-largest cryptocurrency in terms of market value, trailing only Bitcoin. It has maintained this position throughout 2021. In 2019, a staff member of the Ethereum Foundation named Virgil Griffith was detained by US authorities for participating in a blockchain conference in North Korea. Additionally, on August 27, 2021, the Ethereum blockchain encountered a temporary fork due to conflicting software versions.

Understanding the Essence of Ethereum

Ethereum is a blockchain platform that provides extensive functionality for developers who utilize it as the foundation for their solutions. The Ethereum blockchain includes its native token called Ether (ETH), which is used for various activities within the Ethereum network. Ether can also be traded on cryptocurrency exchanges, and its value is subject to fluctuations. Other assets built on Ethereum, such as ERC-20 tokens, require ETH for transaction fees.

Ethereum was developed using the Solidity programming language, with the Ethereum Foundation overseeing the project as a non-profit organization.

Salient Features of Ethereum

Account-based Model in Ethereum

Ethereum operates on an account-based model for transactions between accounts. For example, when transferring ethers from one wallet to another, the process involves debiting the sender's account and crediting the recipient's account. All accounts in Ethereum are represented as balances, which means that a transaction decreases the balance of one account while increasing the balance of another.

The account-based model offers several advantages, including space efficiency, increased fungibility, ease of building decentralized applications (DApps), and easy reference for light clients. However, it may also make double-spending and replay attacks more feasible.

Global State and Account Structure in Ethereum

Ethereum Classic utilizes a transaction-based state system. The state of Ethereum Classic at any given time is represented by a Merkle tree that maps account addresses and their statuses. Each new block updates the state of Ethereum Classic by incorporating valid transactions and linking the block to the previous one through its header.

Ethereum has two types of accounts: externally owned accounts (EOA) and contract accounts. Externally owned accounts are controlled by private keys and do not have associated code. They consist of a nonce (number of transactions sent) and a balance (amount of ethers owned). Contract accounts, on the other hand, are governed by their contract code and also include a storage hash and code hash.

The Ethereum Virtual Machine (EVM)