What exactly is Ethereum, and how does the Shanghai Update reshape it? Powered by Ethereum, Smart Contracts can be created and executed in a decentralized environment without the need for centralized authority. Its popularity has surged as a hotbed for decentralized application (dApp) development. The platform's native digital currency, Ethereum (ETH), is instrumental in driving transactions by charging fees to dApps for utilizing its computational resources.
Shanghai Update – A Leap Forward for Ethereum
Remembering the historic “The Merge” in September 2022, Ethereum made a game-changing shift from Proof of Work (PoW) to Proof of Stake (PoS) as its consensus protocol. This move favored energy conservation, positioning PoS as a greener alternative to PoW due to its significantly lower electricity requirements for transaction validation and new block creation.
Post-Merge, all staked ETH became unmovable, effectively freezing stakers from withdrawing their initial bet and accrued benefits until the rollout of the Shanghai Update.
Initiated on April 12th, 2023, the Shanghai update, or Ethereum 2.0, signaled a new era by unlocking the immobilized ETH. This milestone enhanced Ethereum's network by elevating scalability, fortifying security, and promoting sustainability. Along with these, the update featured the implementation of sharding, a strategy that enhances the network's capacity by facilitating parallel transaction processing.
What Changed to Players
To summarize, Ethereum serves as a decentralized hub for developers to engineer dApps by utilizing smart contracts. The Shanghai upgrade is a groundbreaking improvement on the ETH network focusing on scalability, security, and sustainability.
Smart contracts lay the foundation for the Ethereum platform's trust and security, removing the need for intermediaries and improving transparency while decreasing the potential for fraud. They also offer diverse real-world utilities, ranging from managing supply chains to underwriting insurance, and they're expected to become increasingly vital in the unfolding landscape of decentralized technology.