Ethereum 2.0 is coming – Here’s what you NEED to know

Ethereum 2.0 is going to bring a huge amount of changes to the Ethereum network. It's going to bring a lot of upgrades to how fast Ethereum runs, the scaling aspect of it. But that's not it. It's going to bring a huge amount of economic changes too, changes that affect us, the everyday user. Namely, you can probably see there are people accumulating exactly 32 Ethereum right now. And we're going to explain exactly why that is. But also something that's quite peculiar is that for a period of time, almost one, two years, there's actually going to be two Ethereum tokens. There's actually going to be a new ETH2 token potentially in existence. So we're going to tell you guys exactly what's going to happen now and the rules of what's going to happen so you don't get caught off guard. Now, one of the reasons why Ethereum has been trying to implement so many new features is that the criticism for Ethereum has been melting. Over the past few years, there's been a lot of vocal critics saying, oh, Ethereum is too slow. It's downright broken at times. And in many ways, Vitalik has been clapping, dancing, and gathering his developers together to come up with the ultimate solution to this. This episode is brought to you by Femex Exchange. Femex just launched their zero crypto fee trading program. And this is really getting rid of one of the biggest pains in crypto. So for example, on Binance this month, I traded 88 Bitcoin worth of trades, which roughly equates to $534 off trade fees. Don't ask me how I got there. On Femex, I will be just be paying $9.99 per month, which is far cheaper. If you're interested, check out the link down below. You know what, guys, I'm going to jump straight into the economic side of this first, because this is going to drastically impact how some of us want to collect passive income of Ethereum. That's right. You heard it right. You can now in the future, once this is all launched, collect passive Ethereum over time by just running an Ethereum validator node. So what's cool is in fact, right now we got a validator node set up and every day is generating 0.0133 ETH per day. So roughly at today's prices, we're generating around $2.5. If you look closer here at this chart, you can see that we're slowly, the blue line up here, you can see that we're slowly accumulating more and more ETH every hour. And you can notice this, yeah, the green line, this is how much we're meant to stake. So by staking, we mean you have to actually lock it up and you must have at least 32 ETH. So if you have under this, you're not allowed to run a staking node. And that's why everyone has been over the past few years accumulating just 32 ETH or a little bit more of that and you see wallets containing 32 ETH growing more and more. So there are a lot of people already anticipating this change and preparing for it. Now, something to note as well. And something that's quite interesting is that you can also see that the initial part, we actually lost a bit of money. And this kind of explains the purpose and the value of having an Ethereum 2.0 node. It needs to stay online because it's being called to do crucial votes. So if it's offline, if it's not kind of voting in the Ethereum jury, then it's going to get penalized. So in fact, you're not just getting ETH and keeping interest, but you're doing something very valuable on the network to keep the network running. And that's the whole idea behind proof of stake. You're staking, but also performing actions, useful actions on the network. So over here, you can see a list of what my server has been voting. The attestations has been doing. And in return for performing those actions, you can see the accumulation of Ethereum over time. Only sad part, obviously, right now is that this is using test ETH. So everything I'm talking about here, it's still in a testing phase. And all that Ethereum is not real. It's on the Ethereum Goary test net. And you can actually test this out for free. And we have a full guide on our channel on a website right here. I'll put the link down below. Now you can see this here. This has been what I've been using to mine Ethereum. And previously, it's possible to gain quite a good income from Ethereum. But once Ethereum 2 starts to launch, it's going to start slowly migrating to proof of stake to those servers over there. And the economic side is going to fundamentally change. So instead of miners getting rewarded, stakers are getting rewarded. And instead of people investing in video cards like this one over here, they're going to start investing in Ethereum to gain that passive income. All right. Then does that mean we should throw away our Ethereum miners? What's the timescale for this? Well, actually, the timescale is not going to be like a Thanos snap. It's actually going to take quite a long time. In fact, it's going to move through phases. So we're going to talk in following section a little bit about what the phases of Ethereum are and what the state of every phase is going to be. There's going to be three phases. But being standard programmers, they're going to call it and start it from zero. So we have phase zero, one and phase two. Phase zero. So currently, what's happening right now is we're approaching phase zero. So we're kind of doing all the groundwork for phase zero. And in fact, there's also code out for phase zero. So remember the validator node that I'm running and passively correcting Ethereum on. This is the testnet for it. So testing this in progress. It's not going to be the testnet. So it's going to be a grand, grand test of this before it finally launches. But we're going to see we're seeing the preview of it in action. What phase zero is going to do and it's going to bring along is it's going to bring along something called the beacon chain. This is the primary objective of this phase. Now, the phase in terms of economics is very, very interesting because to bring about this change, you need these validators and you need that state Ethereum. And to do so, you actually must make a conversion. You must make a conversion to this new token called Ethereum 2, ETH2. And it's actually going to be completely different because once you do that conversion, once you convert to ETH2, you will actually be able to convert back. But you are going to gain one special benefit, which is that you are going to be able to stake that ETH2 and start earning every day a certain passive income for staking on the network. And what will you earn? Of course, you'll earn more ETH2. So this is a way of getting passive income from your ETH1, the new network. Now, moving on to phase one, this is when things get very interesting. Now, if you imagine Ethereum as a crystal, the crystal of Ethereum, Ethereum one is phase one is going to smash that crystal into 64 different shards. Now, why would you want to do that? It's because each shard now has the ability to compute in parallel. It's going to almost, you can think about it as 64Xing the power of Ethereum. But it's actually a little bit beyond that. Each shard is going to be even more powerful and it's going to be separate from each other. This is something that's actually done quite a lot in databases. So if you actually run video games or if you run the back end of IBM servers, you'll see that sharding architecture is pretty much widespread adopted in the entire database space. But in the blockchain space, it's just been a little bit harder to implement. More precisely, reason being is because if each shard operates differently, how do you transact between these shards? And what makes what's guaranteed do you have that people won't try to exploit these shards to even duplicate items or duplicate new coins? And this is why it's been so hard taking more than three, four years of time for developers to come up with the solution to this. So what's going to happen in phase one? We're going to have these cross-chain links. We're going to have a lot more computational power. Developer side gets a lot more complicated here because they actually need to choose which shard to be at. Although meanwhile, though, you don't have to really worry about Ethereum itself. The main chain that we're on is still going to run in parallel. So everything that's going to happen is kind of going to be happening in the isolated environment, in the beacon chain, in these cross charts. They're going to be a lot for developers to try to experiment, try to fix and break, and not going to affect the main operation of Ethereum that we know today. So we're still keeping that alive. Phase two. Phase two. Now, this is when everything gets together. This is the combination phase, the melting pot of ideas. This is when the main chain that we're on, the proof-of-work chain, this gets merged into those shards. It becomes a whole again. And now Ethereum, that's going to become melted together to become the full power of Ethereum. It's almost like Transformers coming together, molding and becoming that ultra-megatron that we've been waiting for. Migrating and becoming Megatron is easy to say, but it's hard to execute. So right now, it's still an open question as to whether all Ethereum 1.0 contracts will be migrated to 2.0. So that's still an open question and it's open up to debate. So what I see here is that phase two will very likely be far further out in the future, maybe two or three years, and everything will be subject to change at that time. And this is also where the uncertainty of miners come in. Because overall, in phase zero and phase one, developers will be testing proof-of-stake to see if it is safer than, of course, or if it can be just as safe, rather, as mining. So this is where things get a little bit more cloudy to say the least. I think there's a lot of room to decide whether Ethereum still wants to keep some of that mining infrastructure there. But at the same time, there's definitely a huge push to migrate fully to proof-of-stake. And obviously you can tell that I'm pretty excited for everything. And I do have to say that this has been a long time waiting. In fact, when I started making videos, we started talking about the ideas of proof-of-stake, improving Ethereum, and that's nearly three years ago. So we had to wait three years for a lot of this to come into full fruition. And for that three years, there has been a lot of changes in ideology, changes in thoughts, and delays on this as well. So managing expectations here, I do want to say it might take longer than what developers are saying it is. To implement these phases. This is, after all, one of the most ambitious projects going on to a live blockchain. It's changing fundamentally down to this core of how it operates, how it reaches consensus, and how the server, the infrastructure, and everything is set up. So definitely going to be a lot of hiccups along the way, but I'm very optimistic to see things going forward. And what is definitely exciting me recently is the tests for these. Because previously, all we got were some kind of notes, meeting notes, and tabulations. Things are going to come. But finally, we're seeing the first code of this. And there's also going to be quite a few implementations of this code, too. The one that we've been testing out is from Prism Labs. But there's other labs, such as Lighthouse or even Casper Labs, working on different ways to write software to connect to each other in phase zero. On top of that, we have the resource on Ethereum 2.0 on boxmining.com. So make sure you do check that out for the full list of information and what we are doing with our validator node as well. And with that, guys, thank you guys so much for watching. If you definitely found this video helpful, click the little like button down below. And of course, if you haven't done so already, subscribe to the channel. What are you waiting for? Guys, thank you for watching. See you next time.