Coinbase is already adding ETH2 ahead of this week’s update
The Coinbase crypto exchange appears to be preparing for a major upgrade to the Ethereum blockchain that will take place this week on December 10th. She has added a mirrored version ETH2 of the native cryptocurrency Ethereum (ETH) to the Ethereum blockchain.
This new version of Ether only tracks the original Ether market data synchronously. As can be seen in the tweet below, the cost of buying ETH2 is the same as that of the ETH cryptocurrency. The two trading volumes, market capitalization, circulating supply and price are the same.
Unlike the original ETH, however, the new ETH2 cryptocurrency shows no trading activity. It appears that the newer version will only track ETH market data through mid-2022. It also shows that Coinbase is making all the early preparations for the Ethereum 2.0 upgrade. ETH2 seems to act as the native cryptocurrency of the ongoing update of the Ethereum blockchain. Interestingly, the most recent ETH 2 listing on Coinbase comes just before the upcoming Arrow Glacier upgrade.
Arrow Glacier Update before Ethereum 2.0
The upcoming Arrow Glacier update for Ethereum will delay the difficulty bomb that would make it harder for people to mine ether. However, if the bomb is triggered, it will slow down the Ethereum blockchain as long as it remains proof-of-work.
Tim Beiko, one of Ethereum’s core developers, said the Arrow-Glacier upgrade will likely be the last upgrade before the Ethereum 2.0 launch in June 2022. Ethereum 2.0 will bring a significant change in network design, namely the comprehensive transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) blockchain.
In the existing PoW-Ethereum network, the nodes have to validate every transaction in order to receive the public Ethereum ledger. However, with the upgrade to Ethereum 2.0, “sharding” will be introduced. The entire network is divided into small segments, so-called shards. Later on, the nodes are randomly assigned to each shard.
As a result, every node no longer has to scan the entire chain, which increases speed and lowers the costs of maintaining the network. These individual shards will share the transaction details with the Beacon Chain, the backbone of Ethereum 2.0.
ETH2 is not going to be a new cryptocurrency
The Beacon Chain will validate transactions on each shard and at the same time support the Ethereum 2.0 network in finding consensus. It will track down dishonest validators and initiate further sanctions by withdrawing part of the validator’s effort.
The current ETH token will serve as a staking token in the Ethereum 2.0 PoS design. The use of ETH enables the validators to participate in the network consensus and thus receive block rewards.