The launch date for ETH 2.0, which was originally planned for 2019, will now likely take place between 15 and 16 September, the Ethereum Foundation has announced. This follows the succes of the Goerli Testnet merge, which was the third and final testnet merge before the official Merge of the Ethereum mainnet.

ETH 2.0, now known as the ‘consensus layer’, will see the world’s second-largest cryptocurrency move from the energy-hungry proof-of-work (PoW) consensus mechanism to the leaner, greener proof-of-stake (PoS) system.The three parts to ETH 2.0

Despite each part of ETH 2.0 being worked on in parallel, they have certain dependencies that determine the ETH 2.0 release date. The three elements are The Beacon Chain, The Merge and Shard chains.

The Beacon Chain, which brings PoS to Ethereum, went live on 1 December 2020. It is not yet incorporated into the mainnet and will run in parallel until the transition, or The Merge, takes place in September 2022. Meanwhile, Shard chains will expand Ethereum’s capacity to process transactions and store data. Shard chains should ship sometime in 2023.

The move will also expand the network of stakers. Staking is the act of depositing 32 ETH to activate validator software. Validators are responsible for storing data, processing transactions and adding new blocks to the blockchain.

Coinbase, the American cryptocurrency exchange platform, describes staking as “the process of actively participating in transaction validation (similar to mining) on a PoS blockchain”.

The Merge is expected by the middle of September and will mark the end of PoW for Ethereum. PoW, which will still be used by the bitcoin blockchain and some other cryptos, has been criticised for requiring huge amounts of computing power – and thus energy – to mine new coins. 

Some crypto experts have predicted that ether (ETH) will one day overtake bitcoin (BTC) as the number one cryptocurrency, driven partly by its ability to run smart contracts – automated programs that execute actions when certain conditions are met.

Smart contracts are the backbone of decentralised finance (DeFi), which allows people without bank accounts to carry out transactions.