Eth 2.0 FAQ

ETH 2 is a reality. Let’s answer some questions and clear some things up.

This article will skip basics like What Is Ethereum?, what is blockchains technology? and how do wallets work safely? Let’s jump into it.

1. What is ETH 2.0?
   ETH 2 is the project to upgrade the Ethereum blockchain and Virtual Machine, to make it faster, bigger, safer, and many times more energy efficient.
2. Is ETH 2.0 live?
   No, it’s not live yet, although the proof that it will be launching very soon is that nearly 700,000 ETH has been deposited in preparation of its launch, and that there are working test networks that are live which are the basis of Eth 2. But lots of people have been working very hard on it for a very long time and we expect it to be fully live soon.
3. Will it be live on December 1?
   No, the entire full release of Eth 2 will still take some time. But the first part is already on. December 1, 2020 is the launch of the first part of the Beacon chain and a continuation of Phase 0 of the upgrade, but the rest of the Ethereum blockchain in its current form continues to exist.. for a while.
4. What is Phase 0?
   Phase 0 is the first part of our transition from ETH 1 to ETH 2.
   Since this is a big change, and it’s not just 1 person updating some software in a single location & there are no take backs, different parts will roll out over time. You can read the official specs for Phase 0 that the community agreed on here. It is broken down into Deposit Contracts going live (✅), dependent on reaching a minimum amount of deposited Eth (✅), and also includes the validator nodes run by everyone participating in the network, the new core blockchain features called the Beacon Chain, the Fork Choice for the transition, and an interface for peer to peer communication between nodes.
5. What are the other phases?
   We are already well into Phase 0. After that comes Phase 1, when the Beacon Chain takes over a bit more and sharding the network into smaller faster regions starts. Phase 2 is currently a research project which includes more scaling and privacy measures.
6. When does the rest of Eth 2.0 launch?
   Things will really ramp up with the phase 1 launch in early 2021. Phase 2 has no real timeline yet since it’s mostly research and development at this point, but I’m hoping late 2021/early 2022 for Eth 2 to be complete.
7. Do I need to buy the 2.0 version of Eth?
   No, it’s not a new type of asset, it is an upgrade to the entire network, but still powered by the same Eth.
8. What is Proof of Stake and why is it better than Proof of Work?
   In order to secure most blockchains (like dogecoin or bitcoin) computers do a bunch of hard time consuming math which uses (read wastes) a lot of electricity. This is known as mining and blockgeeks has a great explanation article on it. Instead of using electricity and time to secure the network, Eth 2 plans to use valuable assets (ETH, currently ~$605 each), which miners “stake” on each transaction that they process. Because money instead of electricity is staked, the energy impact can be orders of magnitude less, which is better for the world, and doing less math means the system could be much faster.
9. What is “staking”?
   Staking in ETH 2 is putting up 32 Eth and making a bet that you (your node) will process a transaction correctly. Nodes which process transactions are given a reward, nodes that cheat are given penalties, and nodes that have downtime or aren’t behaving have penalties.
10. What are the estimated returns from staking?
    If 700,000 Eth is used for staking then the reward will be 18.7% return in Eth per year. If more Eth is staked each node’s rewards are less. There’s a great graph here showing that relationship.
11. Can I lose money during staking?
    Yes!!! You can lose all your money in staking. There are punishments for downtime or not keeping your client updated/working as expected. You should stake if you really have done a lot of research and are familiar with the hardware required to do so. If a node receives many penalties it can be slashed and forced to exit the network.
    Again. YOU CAN LOSE YOUR ETH BY STAKING.
12. How much Eth do I need to stake?
    Staking is done in 32 Eth increments, so you need to have at least that much. Although you can deposit less than that at a time if you choose (probably dont do that.)
13. What hardware do I need to stake effectively?
    Honestly, if you are doing hardware research in a general FAQ, then staking probably isn’t for you. Check out the specs for the beacon chain.
14. Can I stake on Eth 2 at home if I don’t have great hardware or trust my internet uptime, or have less than 32 Eth?
    Sure, there are tools like Staked.Us that will bring the hardware and uptime, while you bring 32 Eth and just pay them a few dollars ($5/month). There are also pools where people pool together resources if you have less than 32 Eth to put in.
15. How much faster will Eth 2.0 be?
    Some people are hoping to increase speeds to 100,000 transactions per second, but the jury is still out since the final specs for Phase 2 have not been decided and all the possible ways we can scale have not been researched yet. This is a new frontier.
16. Where are the deposit contracts?
    There is only 1 official deposit location, located at the address 0x00000000219ab540356cbb839cbe05303d7705fa. If you think you’re ready to deposit, I encourage you to check out Staked.Us first, since they handle all the hardware and report 100% uptime.
17. If I don’t deposit my Eth in the Deposit Contract before Dec 1, 2020 can I still be a validator?
    Yes, you don’t need to deposit by December 1 unless you really want to be in the first batch as an early adopter (possible future airdrops to those who were???). Personally, I am choosing to wait a few weeks.
18. How much Eth has been deposited into Eth 2 so far?
    At the time of writing this, almost exactly 700,000 Eth (currently valued at ~$605 each) has been deposited and is waiting for staking to go live.
19. How much Eth will be deposited total?
    No one really knows, but the more that is deposited and staked successfully the lower the return for each person staking. The percent of the rewards you get will be greater if less people participate.
20. Can I take my Eth out if I don’t want to stake anymore?
    No, the deposit contracts are one way. Don’t put any Eth in if you aren’t sure or if you want to get it back any time soon.
21. When does Vitalik update the master node?
    There is no master node, there is no single person who updates anything to Eth 2. We are a community, and we have the ability to coordinate without centralization.

I hope you’ve found this helpful. If you have other questions about what is coming in ETH 2, ask me here or on twitter. Did you know that you can hire me and my studio to build apps on Ethereum for you?

If this list is missing any question you have, ask it and I will do my best to answer, research, and add it here. Thank you!!!