When they say it’s a historical upgrade, yes, it is. The Ethereum Merge is one phenomenal upgrade to drive from the proof-of-work (PoW) mechanism to proof-of-stake (PoS), called the Merge. The original Ethereum Mainnet has now merged with a separate proof-of-stake blockchain called the Beacon Chain and now together makes it The Merge. As a result of their merger, the energy consumption of Ethereum is reduced by ~99.95%, which paved the way for the next scaling options like sharding.
The Beacon Chain’s consensus layer and the Ethereum Mainnet execution layer were finally merged on September 15 at 06:42:42 UTC at block 15537393. After several years of developments and delays, The Merge is a massive upgrade making it an energy-efficient system and lowering the barriers of entry for the users. The more environment-friendly PoS system is designed to limit the number of miners, which results in reducing the total power consumed by crypto mining.
On the other hand, with the Merge upgrade, the Ether, the native token of the Ethereum network being the second most valuable crypto in the world, will now boost its value with more developers showing keen interest in building apps on the Ethereum blockchain. This upgrade will result in high trading volumes of ETH, which is notably witnessed already on crypto exchanges such as BuyUcoin and Crypto unicorn. This is not over yet.
To attract and boost up the trading activities around the Merge, the exchanges are running special offers to incentivize crypto traders and enthusiasts. This is going to be another beginning for those who have stopped trading due to the ongoing bear phase of the crypto market.
The Merge is also going to change the traditional use cases of the enterprises with more security and extra energy savings with proof-of-stake.
Ethereum’s developers say that the Merge upgrade will make the network that houses $60 billion ecosystem of cryptocurrency exchanges, lending companies, NFT marketplaces, etc., more secure and scalable.
Ethereum’s proof-of-work system was where crypto miners competed in writing transactions to its ledger, solved cryptographic puzzles, and earned rewards for all their efforts. Now with this new system, proof-of-stake, miners are replaced by validators which means people who stake at least 32 ETH by sending them to an address via the Ethereum network, where they cannot be sold or bought. The more a validator stakes, the more likely it is to draw one of the tickets and gain the ability to write a block of transactions to Ethereum’s digital ledger. Isn’t it made easy?
Well, there are a set of latest incentives too, for those operating these computers to follow the rules as written. These incentives are a way to secure the ledger from unwanted tampering. In a proof-of-stake system, the amount of ETH one stakes dictates the control over the network. The PoS will also make it a tougher and an expensive effort for attackers who are trying to harm the network. Also, their staked ETH can also be slashed or reduced as a punishment.
“This is the first step in Ethereum’s big journey towards being a very mature system, but there are still steps left to go,” said Vitalik Buterin, Ethereum’s co-creator, as he reflected on the Merge during Thursday’s viewing party. He also mentioned that Ethereum’s relatively high fees and slow speeds, which were not addressed by the update but remained as much a barrier to growing the network’s user base as environmental concerns ever were.
To the Merge, Cheerssss!