The Ethereum Merge has been the most talked about event lately. Being one of the essential occasions in the development of blockchain technology, it signifies a radical change in the operation of the Ethereum blockchain.
September 15, 2022, marks the day when The Merge was implemented, officially concluding Ethereum’s switch to proof-of-stake (PoS) consensus and resulting in a 99.95% reduction in energy use. According to the Ethereum Foundation, it is the biggest upgrade in Ethereum’s existence. But what exactly is the Merge and all the hype about? Let’s have a detailed look.
Ethereum Merge Basics
According to market capitalization, Ethereum is the second-largest virtual currency on the market. It offers blockchain developers the infrastructure to develop and launch their apps and crypto assets.
Before the Merge, a Proof-of-Work (PoW) consensus was employed by the Ethereum network to verify and incorporate transactions into its blockchain. PoW involves competing with cryptocurrency miners trying to solve a challenging and energy-consuming mathematical equation.
The Merge marked a substantial improvement to Ethereum’s existing blockchain consensus system and altered how new cryptocurrency transactions are recorded on the blockchain. As a result, increased stability, safety, and durability were delivered, which was an exciting step toward bringing the Ethereum concept to life.
In essence, Ethereum switched from a PoW blockchain that relied on mining to a PoS system that is more flexible and energy-efficient. This was accomplished by connecting the Beacon Chain, a PoS-based system, to Ethereum’s mainnet.
Following The Merge, stakers, who locked ETH for the privilege to verify transactions, took the position of Ethereum’s miners. The Merge significantly lowered energy consumption after this revolutionary shift.
The Bitcoin system uses the PoW model, which needs a significant amount of energy than that of the PoS approach. Many cryptocurrency skeptics and supporters alike have focused on the adverse environmental effects of cryptocurrencies. Therefore Ethereum’s switch to PoS is a big advancement. Additionally, it will lay the foundation for other elements of the network’s vision, such as improving transaction efficiency.
What does the Future Hold?
The Merge is simply the first step in a succession of anticipated Ethereum blockchain updates. The next upgrade is named the Shanghai upgrade. After this, Ethereum will experience more upgrades called the surge, verge, and purge.
The Merge update does not include several functionalities, like the capability to extract staked ETH to streamline and optimize attention on a smooth migration to proof-of-stake. Hence, the Shanghai upgrade will come next, allowing investors to withdraw easily.
The surge is all about implementing sharding, one of the suggested network scalability solutions that can only function with a PoS consensus system. A blockchain can be divided into smaller, separate shard chains through sharding to lessen congestion issues and boost transaction speed. With this step, Ethereum’s peak transaction processing pace will grow from 15-20 transactions each second to over 100,000.
The verge is the next planned application of a Verkle tree-based mathematical proof that will allow blockchain nodes to function without obtaining the complete chain’s record. Legacy information on the chain will be deleted as an outcome of the next stage – called the purge. These three updates will provide a blockchain that is smaller, simpler to use, and significantly faster.
The Merge is the biggest modification in history that has occurred to Ethereum and signifies a significant transformation in how the Ethereum blockchain operates. The Merge will probably have several effects. Inflation should be reduced, and staking rates should rise with the switch to a PoS mechanism, making the currency more desirable for investors in the future.