Ethereum 2.0: what is it and when is the Ethereum 2.0 release?

What is Ethereum 2.0?

Ethereum 2.0, known as Serenity, is an upgrade to the Ethereum network that will see it move from proof-of-work (PoW) algorithms, also used by Bitcoin, to proof of stake (PoS). The multi-phase upgrade of Ethereum, including Beacon Chain, Merge and Shard Chains, also seeks to improve the scalability and security of the Ethereum network by making various infrastructure modifications (Source: Ethereum).

Learn more about Ethereum.

When will Ethereum 2.0 be released?

Ethereum 2.0 is expected to be released in full in late June 2022, according to CoinDesk – This figure should be taken with a pinch of salt because of the multiple delays Serenity has faced since its first planned release in 2019. The full release of this upgrade is still subject to change, especially after experiencing delays.  

Keep an eye out for any news related to the Ethereum blockchain with our news and analysis section.

The Ethereum 2.0 launch was initially scheduled in 2019, but the first phase only launched on December 1, 2020. Then in mid-March 2022, Ethereum developers successfully tested the long-awaited merge of proof-of-work chains and programmable blockchain proof of stake.

Proof of stake (PoS) vs proof of work (PoW)

The proof-of-stake mechanism works to validate blocks added to the blockchain by randomly selecting coin ‘stakers’ who process transactions, store data and add blocks to the new Beacon Chain, Ethereum's new consensus model.

To become a validator, users must stake their Ether (ETH), hence the name. Once a staker confirms a transaction, it is sent to the blockchain and the validator earns a reward. Compared to a proof-of-work system, PoS is more accessible as anyone can participate if they have the funds instead of requiring expensive hardware.

Proof of work only rewards miners with tokens after they’ve solved complex algorithms to validate transactions, which is an energy-intensive process. So, PoS is also seen as a more environmentally-friendly way of processing transactions, as it doesn’t require the massive energy consumption.

Some sources say that Bitcoin mining has a carbon footprint equivalent to that of developed nations, which has deterred institutions from adopting the cryptocurrency. US electric car maker Tesla suspended bitcoin payments last year, citing environmental concerns associated with mining. (Source: Reuters).

Is Ethereum 2.0 a new cryptocurrency?

Ethereum 2.0 is not a new cryptocurrency, so the amount of ETH users hold in their digital wallets will not change. Ethereum 2.0 is an update that will improve the Ethereum blockchain. The cryptocurrency of the Ethereum network is still Ether. Although it is unclear whether legacy ETH will be accepted in the new ETH 2 ecosystem.

How to trade ether with City Index

When trading with us, you won’t be trading on the Ethereum network itself, but speculating on the price of the network’s cryptocurrency, ether. This means that you won’t be directly impacted by the change, but if the Ethereum 2.0 upgrade causes a change in the market value of ether, it would play out across your positions.

Here are some of the advantages of trading ether with CFDs:

• Go long or short: take advantage of both rises and falls in the price of ether
• Volatility: react faster to price changes without owning the underlying asset
• Leverage: trade ether with only a small initial investment
• Round-the-clock trading: ether can be traded 24 hours a day

You can trade a variety of cryptocurrencies with City Index in just four steps:

1. Open a new account, or log in if you are already a customer
2. Search for 'ETHER' on our award-winning platform
3. Choose your position and size, and your stop and limit levels
4. Place your position

Or, you can open a City Index demo account to practise trading in a risk-free environment.