In this guide, you will find basic information about the Ethereum 2.0 blockchain project and answers to the most popular questions.
What is ETH 2.0?
Ethereum 2.0, also known as ETH 2.0 or “Serenity”, is a large–scale upgrade of the basic blockchain network, in which the transition from PoW-mining (Proof-of-Work) to POS (Proof-of-Stake) or staking will be implemented. There are four main stages of updating. The first phase started in June 2020.
You can read more about what Ethereum 2.0 is, what the update stages will be, and what will happen to the cryptocurrency after its implementation in this article.
Why should ETH switch to PoS?
The PoS consensus algorithm has replaced the outdated PoW, and developers are moving the platform to a more modern algorithm to improve the blockchain platform. There are several reasons for this:
- PoW is economically inefficient and consumes a huge amount of electricity;
- Possibility to scale the network and increase transaction speed;
- PoS is much more environmentally friendly than classic mining;
- Less investment necessary for mining – no need to invest in expensive hardware;
- PoS encourages investors to hold cryptocurrency.
What are the differences between ETH and ETH 2.0?
The key difference is the consensus algorithm. After the upgrade, holders will be able to launch nodes and receive rewards for their PoS stake. Switching to PoS will improve security, network speed, and energy efficiency.
For the network scalability, the Sharding mechanism will be used, which will increase the Ethereum blockchain bandwidth. The updated network of validators is called the Beacon Chain. More information about sharding and the role of validators in the updated ETH 2.0 network can be found here
What will happen to the current ETH?
All that will change is that new network mechanisms will be added. All other functions, in particular smart contracts, will remain the same. Miners will still be able to mine cryptocurrency using the PoW algorithm. The ETH cryptocurrency will also remain unchanged. You can continue to use the cryptocurrency as before.
When ETH 2.0 will be released?
The first stage (Stage 0) is already running and is currently being tested. The developers do not specify the exact date for the full update. However, it is known that this will not happen until 2021. Follow the updates on the project official website or in the Everstake blog
What is the minimum amount of ETH I can make?
The minimum number of coins to stake is 32 ETH. But a total of 16,384 or more validators will be required to launch the network.
Where can I buy Ethereum 2.0?
Beacon Chain will use the same ETH cryptocurrency that was previously used in Ethereum 1.0. Cryptocurrency can be purchased through popular exchanges, which are easy to find on the Internet, as well as on crypto exchanges. A list of crypto exchanges where ETH is traded can be found on the popular resource CoinMarketCap in the Market Pairs section.
It is not yet possible to buy ETH 2.0. ETH 1.0 can be converted to ETH 2.0
Why is staking good for me?
Staking allows you to earn income in cryptocurrency simply for holding it in your wallet and running a node that processes transactions. This does not require powerful and expensive mining equipment. In addition, the mining equipment takes a long time to pay for itself, and only then will investors begin to make a profit.
Staking allows you to make a profit almost immediately, since no additional expenses are required, except for the fee. But there are risks associated with the volatility of cryptocurrency.
How can I stake ETH 2.0?
To stake Ethereum, you will have to run a special node - validator - or delegate your ETH 2.0 to the Validator. During staking, coins are frozen on your account for a certain time. The minimum amount of cryptocurrency to run the validator is 32 ETH.
How do I get rewarded for ETH 2.0 staking?
As a validator, you vote for blocks to be added to the blockchain. You will receive a reward for this. The reward is calculated dynamically and depends on the network state, the contribution of a particular validator relative to the total contribution, and the staker uptime. Validators will be charged fines for long periods of downtime.
What will happen to my ETH?
Nothing. Everything that does not concern the internal mechanisms of the blockchain network will remain the same: cryptocurrency, wallets, exchanges, and transactions.
What is the ETH 2.0 roadmap?
According to the roadmap, at least three main phases will be implemented, after which the network will be fully functional.
Stage 0. At this stage, the Beacon Chain network will be tested and the validator mechanisms will be debugged. It is already running.
Stage 1. At this stage, it is planned to integrate sharding, which is aimed at improving the scalability of the network. Thus, the network will be divided into 64 separate blockchains, which will increase the bandwidth proportionally. The release is not expected until 2021.
Stage 2. During this phase, transfers, accounts, coin withdrawals, and so on will be added. At the moment, this stage is not fully described and it is not clear what updates are coming. So stay tuned.
Vitalik Buterin on Twitter compiled a diagram explaining the structure of updates.
Where can I find more information about ETH 2.0?
Information about the update is published in major blockchain media and on thematic resources such as EthHub. Check out the Everstake blog to learn more about ETH 2.0 staking, updates, and services that the company offers to token holders.
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