Ethereum 1.0 vs. Ethereum 2.0

You may not know it yet, but Ethereum is in the process of converting itself to Ethereum 2.0. This is the new version of Ethereum, and these changes will dramatically alter Ethereum's architecture and design. For example, Ethereum will no longer use Proof of Work, but Proof of Stake. You'll find below what Ethereum 2.0 is and how it differs from the current version of Ethereum.

What is Ethereum 2.0?

Ethereum 2.0, also known as Eth2 or 'Serenity', is the new upgrade to the Ethereum blockchain. Ethereum 2.0 will be released in several phases, which began in 2020 with phase 0. Each phase will improve the capabilities and performance of Ethereum in different ways.

What is the difference between Ethereum 1.0 and Ethereum 2.0?

There are two major improvements introduced by Ethereum 2.0 that do not exist in Ethereum 1.0. These are the biggest differences between these two versions. Specifically, these are Proof of Stake and the Shard Chains.

Proof of Stake

Currently, Ethereum 1.0 runs on a consensus algorithm known as Proof of Work (PoW). The Proof of Work algorithm relies on physical computing power (miners) and electricity (labour) to add blocks to the blockchain. Proof of Stake (PoS) is an upgrade that improves security, scalability and energy efficiency. Instead of relying on physical miners and electricity, PoS relies on validators (that's what miners are called in the PoS algorithm) and Ether depots.

Shard Chains

Shard Chains are scalability mechanisms that will significantly improve the throughput of the Ethereum blockchain. Currently, a single chain consisting of consecutive blocks is perfectly secure and facilitates the verification of information. However, it is currently required of each node that it processes and validates each transaction in consecutive blocks. This can impact the ability to process transactions quickly (especially during periods of high network activity).

Shard Chains is a mechanism by which the Ethereum blockchain is split up, dividing the responsibility for processing data among many nodes. This allows transactions to be processed in parallel rather than sequentially. More channels and parallel processing lead to much higher throughput. Split blockchain will be deployed in phase 1 of Ethereum 2.0.

What are the different phases of migration to Ethereum 2.0?

Ethereum 2.0 is to be rolled out in 3 phases. Phase 0 was successfully launched on December 1, 2020, and Phases 1 and 2 will be released in the following years.

Phase 0

In the first phase of Ethereum 2.0, the "Beacon Chain" will be implemented. The Beacon Chain will store and manage the register of validators. It will also implement the Proof of Participation (PoS) consensus mechanism for Ethereum 2.0. The original blockchain in PoW will continue to work alongside the new blockchain in PoS, so there is no interruption in data continuity.

Phase 1

The second phase of Ethereum 2.0 is expected to be rolled out in 2021. The main improvement of phase 1 is the integration of the Shard Chains. The Ethereum blockchain is divided into 64 different chains, which allow for parallel transactions, storage and processing of information. According to the most conservative estimate, it will enable 64 times more throughput than Ethereum 1.0 and is designed to handle 100 times more data than Ethereum 1.0.

Phase 2

The third phase of Ethereum 2.0 will likely launch in 2021 or 2022. This phase is less defined than the previous two phases. It will involve adding Ether accounts and activating transfers and withdrawals, implementing transfers and creating runtime environments so that scalable applications can be built on top of Ethereum 2.0. Also, integrating the Ethereum 1.0 chain into Ethereum 2.0 will be carried out in Phase 2, so that Proof of Work can finally be turned off, and the blockchain fully transitions to Proof of Stake.

What happens if I own Ethereum?

Do you own Ethereum? Don't worry, nothing will happen. The Ethers you own are still fully usable on the Ethereum 1.0 channel. At some point, the Ethereum 1.0 chain will become part of Ethereum 2.0, after which your Ethers will continue to function normally, without you having to do anything.

Do you want to participate in Ethereum staking? Then you can choose to become a validator on the Ethereum 2.0 network by depositing your Ether into the validator deposit contract within Ethereum 1.0. Once you have done this, the process is irreversible. Transfers are deactivated during phase 0, so validators will have to wait for phase 2 until withdrawal to a specific fragment is possible. After this, your deposit and accrued reward will be fully usable in Ethereum 2.0.


With version 2.0, Ethereum applications expect more scalability, increasing the ability to process more transactions. There is no such feature in the first version of Ethereum. Therefore, we can also see Ethereum 2.0 as a great improvement over Ethereum 1.0.

Investing in ETH 2.0 by feeding the straking contract, and therefore means that you participate in an eventual improvement of the network. But of course, it is also a great opportunity to make extra money. By striking ethers, you will receive rewards in the form of ETH. So soon, instead of miners (PoW), you will be able to find validators/stakers (PoS) in Ethereum's network.