Hyper-v Generation 1 and 2 VM's usage scenarios

In the New Virtual Machine wizard, you can choose to create a Generation 1 or Generation 2 virtual machine.

Select to create a generation 1 or generation 2 virtual machine will depend on which guest operating system you want to install and the boot method you want to use to deploy the virtual machine.

Microsoft recommends create a generation 2 virtual machine to take advantage of new features such as Secure Boot, Unless the following circumstances must use the generation 1 virtual machines：

• You plan to move your virtual machine to Azure：Azure does not currently support create a generation 2 virtual machines
• The generation 2 virtual machine does not support the operating system you want to install:generation 2 virtual machine only support Windows Server 2012 or later and Windows 8 or later 64 bit editions's operating system. Only some new versions of Linux are supported. All FreeBSD don't aer support.
• There is a previous version of the hyper-v host system in the hyper-v cluster：In previous versions of Hyper-V, there was only one generation of virtual machine. Fail when migrating virtual machine

Can I convert generation 1 VMs to generation 2 VMs?

Yes, you can convert generation 1 VMs to generation 2 VMs，but you need to be aware that there may be risks, and before converting, back up the data.

For more details, see https://code.msdn.microsoft.com/ConvertVMGeneration