TheEthereum (CCC:ETH-USD) network is in for a busy week. It continues a very eventful autumn with yet another upgrade set for Friday. While developers are readying themselves to roll out the Arrow Glacier upgrade, though, investors are having a bout of confusion. Crypto exchangeCoinbase (NASDAQ:COIN) is listing an ETH2 coin on its platform, and it has a lot of traders asking questions. What exactly are the differences between ETH2 vs. ETH?
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First, let’s address the upcoming Ethereum upgrade. Arrow Glacier, the newest Ethereum update, will add some time for developers before the protocol’s “difficulty bomb” detonates. Essentially, the developers made this bomb, which greatly slows down ETH mining and network speeds when detonated, as a way to force them to transition the network from proof-of-work to proof-of-stake.
This transition is set to happen with the Merge upgrade, coming in 2022, but the difficulty bomb is set to detonate this month. As such, the developers are implementing Arrow Glacier to delay the detonation of the difficulty bomb. This will ensure the network doesn’t suffer ahead of the Merge.
The Arrow Glacier upgrade is set to take place on Friday, Dec. 10. In the midst of the chatter about this upgrade, there’s another event which is causing a stir around the network. It appears Coinbase is listing a coin called ETH2 on its platform. Investors have lots of questions as to what this coin is.
ETH2 vs. ETH: Coinbase Listing Causes Much Confusion Around the Two Coins
Coinbase users have taken notice of the ETH2 coin on the platform, listed just above ETH. What is ETH2, and what makes it different from ETH? Is it really a second version of ETH, rolling out ahead of the upgrade? Well, not quite; as it turns out, the ETH2 listing is just something popping up in anticipation of the Ethereum network overhaul. Nonetheless, let’s look at the differences between ETH2 and ETH.
Coinbase might have jumped the gun a little bit with its listing of ETH2. ETH2 is meant to be the second iteration of ETH, and it is meant to launch with the Merge upgrade on the resulting Ethereum 2.0 network. In essence, it is the exact same coin as ETH; Coinbase data shows that they have the same market capitalization, circulating supply and all-time high. Yet, ETH2 has no trading data for the Coinbase platform and no popularity measure like ETH does, evidencing the fact that it is not actually a tradeable coin.
And asCoinTelegraph points out, ETH2 isn’t actually a new coin at all; the coin has been around as long as the Beacon Chain, which launched in late 2020 in anticipation of the Merge. These coins will actually replace ETH in its current form. Nothing will necessarily differ between ETH2 and ETH; the change will simply reflect the fact that Ethereum 2.0 has taken effect. It’s clear that the current ETH2 listing is simply an error coming about as Arrow Glacier is readied.
On the date of publication, Brenden Rearickdid not have (either directly or indirectly) any positions in the securities mentioned in this article.The opinions expressed in this article are those of the writer, subject to the InvestorPlace.comPublishing Guidelines.
FAQs
Ethereum 2.0 marks a significant shift in the network's consensus algorithm. Instead of Ethereum running an energy-intensive proof-of-work algorithm, the Eth2 upgrade (now referred to as consensus layer upgrade) means switching to a proof-of-stake algorithm.
Will my ETH automatically convert to Eth2? ›
Your ETH tokens which are held on the current Ethereum chain, will automatically be accessible on the Ethereum 2 chain and you do not need to do anything.
How many different Ethereum addresses are there? ›
Ethereum Cumulative Unique Addresses is at a current level of 273.28M, up from 273.19M yesterday and up from 235.57M one year ago. This is a change of 0.04% from yesterday and 16.01% from one year ago.
What is the difference between ETH and Eth2 on Kraken? ›
The ETH ticker on Kraken represents “regular” ETH: ETH on the Ethereum blockchain that has neither been staked nor earned as staking rewards. It can be staked, deposited, traded and withdrawn. The ETH2. S ticker on Kraken represents ETH that has been staked to support the Eth2 network upgrade.
Should I transfer ETH to ETH2? ›
There is no need. All Ethereum mined will be compatible with the new ETH2. 0 blockchain. This means that all Ethereum in existence, and in circulation, is being carried over to the new blockchain.
Why is Ethereum 2.0 better? ›
Ethereum 2.0 significantly upgraded the Ethereum network, shifting the network to proof-of-stake from the proof-of-work model. Ethereum 2.0 aimed to improve the network's scalability, accessibility, and transaction throughput.
Is converting ETH to ETH2 taxable? ›
ETH2 was a bit of a misnomer, as PoS ETH was always intended to replace PoW ETH on a 1:1 basis. A concern some had prior to the Shanghai Upgrade is whether the Merge would be considered a taxable event for holders of the blockchain's native token. This is not the case.
Can you unstake ETH now? ›
You can now unstake your staked Ethereum (ETH). This update was announced by the Ethereum Foundation.
When can I withdraw my ETH2? ›
The Shanghai upgrade that will unlock staked ETH is currently scheduled for implementation in April of 2023. Those who have staked ETH will need to wait for the completion of Shanghai to withdraw funds. However, it's important to note that it is also possible to stake ETH without losing access to liquidity.
What person owns the most Ethereum? ›
The largest individual holder of ETH is co-founder Vitalik Buterin, who holds 245.8K ETH.
For other crypto assets (Ethereum, XRP, Stellar, etc.) the address stays the same. Bitcoin transactions are public information. Addresses should not be re-used for better privacy.
How many people own 10 Ethereum? ›
However, the market correction is not having a negative impact on the accumulation of Ethereum holders. Glassnode's recent data shows that 280,792 ETH addresses are now holding 10+ coins. According to the current price of Ethereum, each address has more than $26,000 worth of cryptocurrency in the wallet.
Does it matter if you buy Ethereum or Ethereum 2? ›
Ethereum 2.0 will primarily benefit the scalability, throughput, and security of the Ethereum public mainnet. Ethereum 2.0 will not eliminate any of the data history, transaction records, or asset ownership of the Ethereum 1.0 chain.
Is Ethereum and ethereum 2.0 the same coin? ›
Ethereum 1.0 used the Proof of Work mechanism, which involves mining new ETH blocks to confirm transactions and verify blockchain data. In turn, Ethereum 2.0 uses the stake consensus mechanism Proof of Stake, in which token holders are rewarded for holding coins that are used as tools to maintain the network.
What happens to ETH after Eth2? ›
However, after The Merge successfully integrated PoS into the main Ethereum network, the term “Eth2” became obsolete. There is no longer a separate Ethereum 2.0; it's simply “Ethereum.” Now, the Ethereum network operates solely on PoS, offering improved scalability, energy efficiency, and security.
Will ETH 2.0 be cheaper? ›
On Base, the new Ethereum layer 2 from crypto exchange Coinbase, transaction fees are expected to decline from double-digit to single-digit cents, said Roberto Bayardo, a core developer at Base. “Fee reductions will vary depending on how aggressively the layer 2 chains take advantage of blob data,” Bayardo said.
What happened to Ethereum 2? ›
Since April 2022, Ethereum has been running two parallel blockchains, one that operates using proof of work, and a test chain that operates via proof of stake. The merge will combine the legacy Ethereum Mainnet blockchain (ETH1) and the new Beacon Chain (ETH2) into one unified blockchain.
What is ETH2 on Coinbase? ›
About Ethereum 2 (ETH2) Ethereum 2.0 is an upcoming set of upgrades to Ethereum that's intended to make it significantly faster, less expensive, and more scalable.
What is Ethereum 2.0 also known as? ›
Ethereum 2.0, sometimes called Eth2 or Serenity, is an upgrade to the Ethereum blockchain.
