ETH 2.0 & What You Need To Know

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The future of the Ethereum blockchain is one of the most promising and exciting topics in the crypto universe. Their future roadmap unravels a beautiful new approach to adding speed, scalability and solving many of the challenges of the ecosystem. 


When the Ethereum Foundation reaches their journey’s destination over the next few years, there will be a plethora of terminology, fundamentals and benefits of ETH 2.0 to understand how it all operates. Not everyone can comprehend lengthy and deep technical manifestos. Now you can learn the basics of Eth 2.0, staking, proof-of-work, sharding and the new Beacon-chain. 


Blox wants to make that journey of learning and understanding easier for you!


Here are the key upgrades, benefits and improvements for the future Ethereum 2.0.

Transitioning to Proof-of-Stake

Leaving PoW Behind

The welcome transition into proof of stake is transforming the way trust mechanisms are applied to future blockchains and upgraded blockchains, most notably, Ethereum. It was never any secret that Proof-of-Work has severe limitations and consumed outrageous amounts of energy. Small and medium sized outfits are no match for the large operations that continue to dominate the network. While secure, the original Ethereum was doomed to be replaced and upgraded with something bigger, bolder and incredibly faster – the beacon-chain

The Beacon

Instead of PoS, Ethereum 1 is enabled by Proof of Work and will run parallel (and be bridged) to the new blockchain, which will be dubbed the Beacon-chain. Communication between Eth 1.0 and the beacon chain allows legacy blocks to maintain operations and ensure continuity without erasing the history of blockchain data, transaction records and asset ownership. (Most people will not need to do anything differently.) 


When it comes to speed, scalability and throughput, Eth 1.0 is a humble two-way street and 2.0 is constructing a 10-lane super highway. 


Ultimately, it’s Proof-of-Stake that will introduce greater trust and security to future-proof this upgraded blockchain for said throughout, scale and security. Those that wish to participate in supporting the network have an opportunity to replace crypto mining with crypto staking, a more efficient, secure and potentially lucrative approach to blockchain consensus. 

Become A Validator, Support The Network

Becoming A Validator

For someone to become a validator, the basic requirements consist of 32 ETH, the correct hardware and a validator service provider – either custodial or non-custodial. For a custodial example, users have the ability to stake on Coinbase or Binance (not ETH, though), with their digital assets stored within the exchange. For some blockchain businesses and crypto professionals, surrendering access to private keys or their financial assets is not best-practice. This is where a non-custodial solution can provide validators with a decentralized alternative for staking services.

Staking Supports ETH 2.0

The means of implementing proof-of-stake requires the network be hosted and governed by validators that deposit and stake the minimum 32 ETH to participate in the network. These validators can stake ether and earn interest-based rewards, which is the basic revenue model for ETH 2.0. (Bye, bye crypto mining.) Yet, it more notably serves as the consensus mechanism for attesting, proposing and whistleblowing blocks. (We will get into those very important components in a future blog post, so be sure to bookmark this page!)

The Safe Through Stake Network

The barriers of entry to becoming a validator are shrinking, with more companies providing the necessary infrastructure, tools, wallets and validator solutions. It is getting easier for people to get on board, start staking and support the networks expansion. Remember, the beacon chain requires a specific quantity of validator nodes to secure the network (16,384 Val-nodes). As testnets eventually evolve into full-out mainnets, more validators and stakers will empower the network with greater self-sufficiency and total security.

A Safer & More Reliable Blockchain

The goal of validators, staking and proof-of-stake serves a much higher purpose than just generating interest. They are the pillars that support a future Ethereum that is holistically focused on speed and scale. A true purpose-built blockchain with decentralization at its core.

Testnets & Mainets To Serenity

Prysm, introduced their gem-series of development phases for infrastructure. At time of writing, the Topaz testnet is operating very well, but with a couple small hiccups, expectedly. The evolution of these testnets starts with a basic blockchain requiring GorliEth (test ETH) and 3.2 ETH (previously Sapphire) to minimize block size for testing. But with Topaz, its operating as a ready-to-go mainnet trial, with stakers investing the full 32 GorliETH. 


Validators that have operated through the series of available Prysm testnet phases, will be able to tweak and improve their validator clients. They will enter the market deploying a more stable and efficient performance than other competitors. In the very near future, the Ethereum community will finalize and launch the beacon chain and its new ETH 2 token for validators. Hopefully soon after, the implementation of sharding is what will take this new blockchain to new heights. (Read on for more on sharding.) 

More Than What Meets The Eye

If you’re reading this, then you already know the this new beacon chain and sharding will introduce greater speed, scalability and more. But, there really is more are its core that serves to truly enhance the network in every area. 


The concept of Proof of Stake introduces an interesting component for catching fraudulent activity or bad actors, whistleblowing. The act of whistleblowing is a piece of code that when integrated, reports the potential issue which could lead to a slash against the suspected validator. If slashed, that validator would be removed from the network and its effective balance would be erased. There is risk for the reward and the risk strengthens the network in a new way. For example, the validator that blew the whistle will enjoy a reward for their positive action.


Validators play a pivotal role to securing the network. They leverage the large, staked participation of committed validators at any given time. It’s the balance of active validators that impacts the rewards schemes and financial harmony of the network. By enforcement and consensus through staking, the network becomes more resilient. Even when large volumes of nodes go offline, it can account for the imbalance and maintain operations, another sign of the commitment to resilience. 

Staking & Rewarding

Rewards For The Taking

With Eth 2.0, staking supports the security, efficiency and consensus (via PoS) of the new Ethereum blockchain. It also opens a new opportunity for investors and long-term crypto holders to generate impressive interest from idle Ether. When a user stakes their 32 ETH, they can potentially yield 5-15% yearly interest on staked ETH. This reward mechanism makes staking a very attractive offer. For those who stake, the system rewards the players that stake first.

Early Bird Gets The Stake

The more active validators operating in the network the less each validator is rewarded on average. This is similar to fixed interest securities: the higher the demand, the lower the interest. Early staking players will get to enjoy higher interest rates or rewards and reap the benefits. Anyone can calculate how much interest they can earn by staking, using an online ETH rewards calculator.

The above graph shows that early stakers will have a potential upside of 20% interest on their staked ETH. The more actively operating validators, the less each one will be rewarded for completing a task. This reinforces why early players competing with fewer validators will see greater interest returns.

The Risk For The Reward

It’s important to state that staking and becoming a validator is not without risks. Security and penalty mechanisms exist to prevent bad actors, malicious intent or harmful operations on the beacon-chain. By zeroing-in on these malicious or harmful operations, validators can improve the security of blocks. But validations will face challenges like maintaining uptime to attest when called upon for their duties. If they are offline when selected, they would be charged a penalty against their wallets effective balance. Fraudulent activity could lead to slashes, which erases your ETH wallet balance and removes your validator from the network. A worst case scenario that can be prevented by whistleblowing invalid or problematic network activity from validators. 


If you are interested in learning about staking interest rewards and penalties, you will love our blog post on Eth 2.0 Staking Rewards & Penalties.

The Sharding Protocol

Sharding Fundamentals

When examining how scalability is achieved, you must grasp the concept of “sharding” and why it’s necessary in this new ETH 2.0 world. Previously, every node stored a duplicate of all the blockchain data, resulting in slowly processed operations based on block size or node performance. This imposed restrictions on speed and scale but enforced a secure network. The result is a slow blockchain with a small throughput of 7-15 transactions per second (TPS for Ethereum).


The integration of sharding will instead choose to divide all of the blockchain data across the many node-groups that comprise a network. With a sufficient supply of nodes, the network can guarantee that all of the data and information is readily accessible. Additionally, by reaching that optimal quantity of nodes, the network can be secured while accelerating throughput and its usability for the end user.

Speed Meets Scale

The holy grail would be to exponentially multiply the current throughput of the Eth 2.0 blockchain by reaching approximately 10,000+ TPS. Eth 2.0 will then maintain greater TPS without needing super-powered nodes or juggling excessive volumes of data, or even worse, not having the nodes relay identical data between each other. Achieving sais goals is not an easy feat. It has taken decisive planning and coordination of the Etehreum world to integrate these upgrades and overhaul one of the most promising projects around today.Only time will tell of its success or failure.  


Sharding is the elegant solution to a very complex problem but it still has to wait for its time to shine before becoming part of the next generation Ethereum blockchain.

Want or need to learn more? We got you covered.

Check the Blox Blog for more guides, news and blogs!

By clicking the following links you can read more or watch more about the ETH 2.0 roadmap. 

Blox encourages you to continue monitoring the space for the latest news, support, progress, updates and more. It’s a bold new future for the world of Ethereum, blockchain and the millions of followers around the world.

Who is Blox Staking?

We are the industry’s first non-custodial alternative for providing Ethereum staking services. Blox possesses formidable experience as master node builders. Our DevOps team are code-craftsmen with years of experience building nodes, databases, infrastructure and applications for consumers, businesses and enterprise grade customers. 


Never surrender ownership of your private keys and stake with reliable infra built to be secure and maximize your rewards. By leveraging our blockchain solutions, we expedite the process of becoming a validator, preparing your personal staking wallet and getting you to start staking.

Ready to start staking? Visit Blox today.

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