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October 2021 to Witness Ethereum’s Upgrade.

October 2021 to Witness Ethereum’s Upgrade.
Image Source: Getty Images

According to the announcement on the Ethereum blog, the Altair chain upgrade is going to be launched on Ethereum Mainnet on October 27th at 10:56 am UTC.

There are many upgrades scheduled to be launched in 2021, including the Bitcoin Taproot upgrade and Cardano Alonzo hard fork. Altair is another upgrade that is meant to provide a competitive advantage to Ethereum.

What does this upgrade mean?

Altair is Ethereum’s first hard fork which represents a low stakes warm-up for preparing Beacon Chain developers and clients for the merge that is coming up. You must be aware of the merge where Ethereum is going to have the transition from the proof-of-work consensus mechanism to the proof-of-stake one.

The upgrade is going to provide the Beacon Chain with an increased slashing severity, light client support, per-validator inactivity leak accounting and minor patches to incentives. Note that any person operating a Beacon node needs to upgrade the client version to the new standard, and he will not be able to participate in the new consensus mechanism if he fails to update the client version. Anyhow, the upgrade will not affect the end-users of the Ethereum proof-of-work blockchain.

Altair increases the slashing and penalty parameters.

The upgrade aims to increase the penalty values for validators misbehaviour and inactivity set in the Ethereum 2.0 protocol. Note that the penalty values were reduced to encourage early user participation. In short, the upgrade is not going to forgive any offences in the network.

The good thing is that the upgrade is going to correct the imbalance in the reward distribution. It will increase the block proposal rewards to around 12.5% of the overall validator rewards to evenly split up the earnings for different validators responsibilities. 

We earlier stated that Altair is being represented as a low stakes warm-up upgrade. Let me explain what does it actually mean. It means that a much higher stakes upgrade is going to come up for the Ethereum 2.0 protocol developers that will permanently merge the Ethereum blockchain with Ethereum 2.0 Beacon Chain.

Beacon Chain introduces POS to the Ethereum ecosystem.

Let me briefly explain what exactly does Beacon chain do. Note that it doesn’t change anything about Ethreum that we are using. The chain introduces proof-of-stake to Ethereum, which is a way to keep Ethereum secure. The chain will coordinate the expanded networks of stakers and shards.

Currently, the network is secure by mining. But with the Beacon chain, you will stake ETH to activate the validator software. Becoming a validator is always easier than mining, and hence it will make Ethereum more secure in the longer run.

Closing thoughts

The Altair upgrade adds simplifications to the Ethereum 2.0 protocol, which makes it a lot easier for the developers and the users to track rewards and penalties. We know that Ethereum is the best platform for smart contracts and DApps. But its power consumption was always an issue and was the foremost reason for the growth of Ethreum’s competitors. 

There are many players in the market that claims to be better than Ethereum for that purpose. However, this recent upgrade of Ethereum is going to reduce the power consumption by 99.9%, which indeed is good news for Ethereum users. Hence, the upgrade is definitely going to give a competitive advantage to Ethereum blockchain, being ETH the second-largest virtual currency in the world.