The Transition of Ethereum to V2 and How It Affected Litecoin

Juliet D'cruz

Updated on:

Let’s begin with a general explanation of the scenario to understand what’s going on before taking a deep dive.

Saas services provided a new doorway to the entire trend of cryptocurrencies. Cryptocurrency has been a hot topic recently, with Bitcoin leading the market. Ethereum (ETH) and Litecoin stand as two strong competitors in the market. Although the fight between Ethereum and Litecoin is not unknown or new, there have been some other transitions off the board that took one over the other.

If you are someone new to this entire thing, this is a must-read for you that would give you a better idea of what the whole hype of Ethereum vs Litecoin is all about.

You can also find many great podcasts or streams about this on YouTube, which you can live stream or convert from Youtube to MP3 and listen to them later at your convenience.

Transition of Ethereum to V2

Ethereum 2.0 is believed to be the smarter, securer, more scalable, and sustainable version of Ethereum. It is not yet live, but we already have a glimpse of its features.

If you don’t know already, Ethereum is a decentralized network, and it derives its powers from the digital ledger blockchain technology. It is thus secure and can not be controlled or manipulated by a third party. That being said, there is something that is a little tacky despite its popularity. It only allows 15-45 transactions per second, and since there are millions of users, the system gets clogged, and it becomes hard for the transactions to be smooth because of high traffic. Also, since the demand for Ethereum is high, its fees seem to be seemingly increasing per transaction. 

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Now let’s see the approaches being taken in V2 that claim to improve on these issues. A process called sharding will be followed that will create more networks by dividing the single node into multiple smaller databases. Now in each network, the transactions can take place—so overall, the number of transactions increases, leading to increased efficiency. With efficiency and ease, security increases. 

There will also be a transition from mining to staking in terms of storing the currency, which will make the system 100% more energy efficient. Another feather on the cap is smart contracts; these are a wonderful illustration of security while making the technology easier. Say you have to pay your rent monthly, now all you need to do is sign a smart contract, which will auto-complete the payment every month without any rendition or any interference of a third party.

How Would it Affect Litecoin?

When compared to Ethereum, Litecoin has less of a market presence, although there were still some areas contributing to the growth of Litecoin. Two main issues were the security and transaction fees, but these seem to be resolved with the introduction of the new Ethereum 2.0, and hence, it might affect Litecoin in the longer run.

Hope this article gave you a better reference of the fight between these two powerful currencies while leaving an area of discussion open for you. Although the gains seem to be extraordinary, it is always advisable to do your research before making any such investment.

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