What is ETH2.0?

Compared to ETH1.0, ETH2.0 is not just a patch-like fix to the original network but rather the creation of a brand-new system incorporating the Casper consensus, sharding technology, and a new virtual machine. It completes the transition of the consensus mechanism from Proof of Work (POW) to Proof of Stake (POS), achieving improvements in Ethereum's performance, lower fees, and other aspects. This upgrade equips Ethereum with the capability to serve as infrastructure for financial projects and commercial applications in the future. The upgrade is divided into several phases, each requiring a certain amount of time to complete. Whether considering the time and technology required for the upgrade or the significant functional improvements afterward, this Ethereum network upgrade can be likened to the transition from 4G to 5G or the revolutionary leap from ships to aircraft carriers.

Investment Opportunities from ETH2.0

The impact of ETH2.0's release will manifest in various ways. What are the most relevant aspects for investors?

1. The Impact of the 2.0 Network on ETH Token Prices
   For investors holding or planning to hold ETH, the most pressing concern is how ETH2.0's release will affect the token's price in the near term. The network upgrade requires staking and locking a certain amount of ETH, and the locked ETH supply will continue to grow on top of the existing base. Combined with the extended lock-up period, this will reduce the circulating supply of ETH, potentially leading to a short-term price increase.

2. The Impact of the 2.0 Network on Other Tokens
   At the same time, due to the shift in the blockchain's consensus mechanism, a large number of ETH mining rigs will become obsolete. These idle mining rigs may bring new opportunities to other tokens operating under the POW consensus mechanism. For example, if miners shift to mining ETC, it will inevitably draw attention to the corresponding token, creating some premium potential. This is another investment opportunity worth exploring.

3. Participating in ETH Staking to Earn Mining Rewards
   As mentioned earlier, staking ETH can yield certain rewards. Specifically, the Ethereum network's POS algorithm rewards block-producing nodes, allowing validators to earn income.

However, understanding the rewards alone is not enough—investors must also be aware of the costs and risks of staking to profit steadily during the ETH2.0 upgrade.

Costs of Participating in ETH Staking:

① Staking ETH has certain entry barriers. Setting up a personal node requires a certain amount of ETH assets and a well-performing machine.

② Using third-party staking services lowers the participation threshold but involves service fees. Investors must also understand the risks and avoid blindly following trends.

Risks of Participating in ETH Staking:

① The lock-up period could last several years, during which stakers cannot trade, exposing them to ETH price volatility.

② Once staking begins, validators must fulfill their responsibilities. Penalties, such as fines, may apply if node anomalies occur.

③ The risk of ETH being stolen due to contract vulnerabilities during staking cannot be ignored.

Conclusion

For now, Phase "0" has launched on schedule, but the full mainnet launch will require many more phases and a long time. Recently, core developers discussed potentially postponing Phase 2, suggesting that ETH2.0's completion may not progress as smoothly as expected. Though building an aircraft carrier is a long and arduous journey, its future significance makes the vision worth waiting for. We should also give the development community more time and support. Whether synergizing with DeFi or serving as a public chain infrastructure, how Ethereum will fulfill its role as the cornerstone of the next-generation internet remains to be seen.