Ethereum 2.0, also known as Serenity, is the long-awaited update to the Ethereum network that will see it transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism.
This will be a monumental change for Ethereum, and one that is sure to have a major impact on the price of ETH.
So, what exactly will happen to Ethereum when 2.0 finally launches?
For starters, it is important to note that Ethereum 2.0 will not be launched all at once.
Rather, it will be rolled out in stages, with the first phase (Phase 0) expected to go live sometime in 2020. This initial phase will see the launch of the Beacon Chain, which is essentially the new PoS blockchain that will eventually replace the existing PoW chain.
Once the Beacon Chain is up and running, Phase 1 will then see the launch of shard chains. These are essentially parallel blockchains that will run alongside the main Beacon Chain, and each shard chain will be responsible for processing a specific type of transaction.
This will help to improve the scalability of Ethereum significantly.
Finally, Phase 2 will see the launch of Ethereum 2.0’s actual smart contract functionality.
At this point, ETH2 tokens will be fully functional and can be used to power decentralized applications (dApps) built on Ethereum 2.0.
So, what does all of this mean for the price of ETH?
Well, there is no doubt that Ethereum 2.0 is a highly anticipated update that has been in development for many years now. As such, there is a good chance that we could see a significant price increase when Phase 0 finally launches later this year. However, it is also worth noting that Ethereum 2.
0 is still in its very early stages and there is a lot that could still go wrong. So, while there is potential for UPSide, there is also downside risk to consider as well.
At the end of the day, only time will tell how Ethereum 2.0 affects the price of ETH.
But one thing is for sure: it is sure to be a major event in the world of cryptocurrency regardless of what happens with the price.