Ethereum 2.0 is a complete revision of the current Ethereum (1.0) created by the same creators with the intention of replacing Ethereum 1.0 entirely.
Its final launch is expected sometime between 2021 and 2022, although phase 0 is currently in test net for testing and people are free to participate if they wish.
Instead of making small transformations little by little in Ethereum 1.0 it has been decided to do it all at once starting from scratch to be able to make the changes much more efficiently without being subject to the limitations of the first version or having to think through intermediate phases to accommodate a transition by steps.
Among the main changes that this new version will offer are:
Proof of Stake consensus algorithm
The sharding method will allow you to stop using a single blockchain and instead have up to 64 different parallel chains, which will allow the network to scale better. These 64 chains converge on a central chain called a Beacon chain.
The Beacon chain does not store any transactions or information, but rather acts as the basis of the PoS system, keeping the record of the validators.
Validators are those people who stake a minimum of 32 ETH and consequently are allowed to validate blocks in exchange for rewards of 2-18% per year of their stake.
If a validator validates incorrectly (or maliciously) a block will be penalized with up to 100% of its stake. Validators will also be penalized for not being online when it is their turn to validate (so being always online is a validation requirement). As a validator is penalized, if its stake falls below 16 ethers it will be expelled from the validation groups.
The beacon chain chooses the validators randomly using the RANDAO and VDF algorithms. Validators will be chosen randomly from among those and given the opportunity to validate a block. If they validate it correctly they will receive the reward.
Right now we are in phase 0 in which the beacon chain is already launched.
In phase 1 shards and the change from PoW to PoS will be introduced.
In phase 2, all Ethers from ETH1.0 to ETH2.0 will be incorporated by copying their state. Users will not have to take any action for their funds to be transferred.
If this implementation turns out to be successful, it would mean great advances in Proof of Stake and consensus algorithms in general. Recall that Proof of Stake remains untested on a scale as large as that offered by Ethereum, so the entire platform should be considered an experiment with the risks that this entails.