Due to the complex nature of transitioning from Ethereum to Ethereum 2.0, certain aspects trigger uncertainty. For some users, there is no clear indication as to what happens to their Ethereum 1.0 coins. Luckily, there is no reason for concern.
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The Ongoing Upgrade From Ethereum 1.0
It is not uncommon for blockchain upgrades to affect users’ balances. More specifically, several projects will perform a token swap when a core change occurs at the protocol level. Considering how complicated and invasive the Ethereum 2.0 upgrade is, it is not surprising to see some confusion regarding this aspect.
Additionally, the Ethereum 2.0 upgrade will take several months, if not years. Such a long period makes people all the more worried about a potential token swap. In the case of Ethereum 1.0, the blockchain will remain operational until Ethereum 2.0 Phase 1.5 goes live on the network.
Until that transition happens, and even afterward, there will be no impact on Ethereum 1.0 coins. Anyone who owns Ether today will still hold it in the future, assuming they don’t spend it. This upgrade will not require a token swap or anything similar to that. Instead, it is a technical upgrade that has no impact on the native asset’s structure.
Can I Have Both Ethereum 1.0 and Eth2 Coins?
Contrary to what has happened with Bitcoin and Bitcoin Cash, no part of the Ethereum network wants to trigger a chain split once Ethereum 2.0 Phase 1.5 goes live. With such a chain split, users will effectively own a balance on the two chains simultaneously. Those who had hoped to double their Ether are out of luck, as there will not be a chain split.
While it is true that Ethereum 1.0 and Ethereum 2.0 will co-exist side-by-side for the foreseeable future, the coins’ movements are shared between both chains. Both of the networks are interoperable, rather than maintaining their records; As such, any Ether being spent will be “recorded” on both chains at the same time, effectively helping users keep their correct balances.
It’s An Upgrade, Not a Coin Swap
When it comes to Ethereum 1.0 and Ethereum 2.0, it is crucial to get the core aspects right. Unlike what the name may suggest, Ethereum 2.0 is a technical upgrade of the Ethereum blockchain. It is not a replacement in the traditional sense. While Ethereum 1.0 will be phased out in terms of support for proof-of-work, its existing ledger balances, accounts and transactions will carry over.
The individual phases of Ethereum 2.0 are designed to make the blockchain more performant and viable. Adding more features and improving certain aspects is crucial for the future of Ethereum. It has no impact on the issuance of the coin to date, but it will affect ETH’s inflation rate once proof-of-stake replaces proof-of-work. All of these changes are enforced.
Existing and future ETH holders have nothing to worry about during or after switching from Ethereum 1.0 to Ethereum 2.0. The network’s financial assets will remain the same, as there will be no swaps or chain splits.
What is essential, however, is appropriately securing one’s ETH assets. Doing so through a hardware wallet or by using a trustworthy exchange is always advised.