Ethereum 2.0 (Update)

History of Ethereum upgrades

Ethereum 2.0, also called Eth2 or ‘Serenity’, is the next upgrade to the Ethereum blockchain. Ethereum 2.0 will be released in multiple “Phases” starting in 2020 with Phase 0. Each phase will improve the functionality and performance of Ethereum in different ways.

Instead of relying on physical miners and electricity, PoS relies on validators or virtual miners and deposits of ether.
Validators are people who elect to continue the blockchain by staking 32 ETH into deposit contract.
Validators are selected from the pool based on magnitude of stake.
On successful validation of block, validator will receive an ETH reward.
Validator misbehaviour will slash deposit – loss of some or all of their 32 staked ETH.

Crypto-economic security less electricity consumption
No need of enormous mining facility unlike PoW, staking on Ethereum 2.0 will only require a consumer laptop
Increase decentralisation of network

It is like adding another lane to upgrade Ethereum from a single lane road to a multiple lane highway. More lanes and parallel processing leads to much higher throughput.
Shard chains are a mechanism through which the Ethereum blockchain is “split” – thus dividing the data processing responsibility among many nodes.

Add scalability and hence increase throughput of the blockchain
Transactions can get processed in parallel rather than consecutively
Currently single chain is incredibly secure and secure to verify but each full node to process and validate transaction can affect ability to process transaction quickly.

Rewarded for proposing, attesting and validating next block in the chain.
Payout done periodically i.e. after every epoch completion.
Payout calculation is based on total amount of ETH staked and average % online of validator(s).
Rewards minus penalties are transferred to validators every epoch

In order for the Beacon Chain to launch, at least 16,384 validators will be needed, which equates to 524,288 ETH staked. Staking rewards are not distributed until the Beacon Chain reaches the genesis threshold.

ETH holder may run their own validator(s) by staking ETH in increments of 32 on the network. Running your own validator node means you have the responsibility to validate and organize blocks – not doing so could result in a penalty of ETH.
Eth holder can stake their rewards through a staking provider or join a staking pool with smaller amounts of ETH, through which anyone can stake whatever small amount of ETH they are able to and still receive rewards proportional to their contribution