April 9, 2024


Crypto News and Signals

Ethereum 2.0

2 min read

Ethereum 2.0 is expected to be shipped in July 2020. This will change Ethereum from a proof-of-work to a fully staking platform. That means instead of competing against each other to solve mathematical questions, the users who own most ETH will be in charge of validating the new transaction and receive a payment for validating them.


That means a lot of people are investing and planning on investing to ride the staking wave.


In order to stake, you will need to keep the ETH in your wallet and not sell/trade or move them. That means the demand of ETH will increase (less people will sell there ETH). At the present calculation staking ETH will generate you between 4 ajd 10% annual. Investors usually look for a 3 to 5% annual save return.


Some people are sceptical that staking will increase ETH price, because ETH has been staking in the pipeline for years DeFi protocols. The current price should be already the same price as when staking begins because of that.


We see that in recent weeks the address holding more then 32 ETH (the minimum amount required to become validator to stake in ETH 2.0) have increased by more then 14% since 2019.


The other think that sends signal that the price will increase is reduced annual issuance from 4.7 million ETH per year to 2 million per years. This reduction by its own should increase the demand and the price of ETH.


FOMO effect.


Because of the decreased issuance, the staking validator and the increased demand we are probably going to see the FOMO effect (Fear Of Missing Out). A lot of people have jumped on Bitcoin just because of the FOMO effect and wanting to get rich quick.


One of the bad things on stacking is that threat of centralisation becomes real. By using proof-of-stake, the people with more ETH wallet will decide the way the network operates. The bigger the wallet, the more influence you will have. If a group of only a few people own33% (not like the 51% attack that can happen on BTC network)  of the entire stake, it will be almost impossible to take the network away from them.

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