Key Takeaways
- Ethereum’s first intention of switching to Proof-of-Stake was shown in 2015.
- The book written by Vitalik Buterin, co-founder of Bitcoin, on the proof-of stake that has been compiled for over 10 years should be available later this month.
Ethereum’s developers have finally completed seven years of work to switch its consensus model from proof-of stake (PoS) to Proof-of-stake.
Merge of protocol was triggered when On Thursday, September 15, at 6:43am UTC (2.43am ET), the Blockchain reached Total Terminal Difficulty 58.750,000,000T. Blockworks Research’s data shows that Ether was trading at around $1,588.12 following the software upgrade to save energy.
In 13 minutes of tension, Ethereum researchers and developers confirmed the production and completion of new slots, as these are called in proof-of stake Ethereum.
On the day of the event, over 40,000 people watched the live stream from the Ethereum Foundation.
“As far as I’m aware, as far as I can tell from this stream everything was absolutely optimal, so that’s just great!” Superphiz, a member of the Eth Stakers group and the organizers of the event said that the party was a celebration.
According to BitOoda, it is the Merge that has caused the greatest excitement in the crypto-world.
“It represents switching the underlying consensus engine of the blockchain while Ethereum continues to run and support the $100 billion+ DeFi, NFT and app economy without a hiccup,” Vivek RAMAN, BitOoda’s PoS head said.
This upgrade aims also to unintentionally silence critics about the energy usage of the sector, which is partly blamed for contributing to the climate change.
Ethereum estimates that the merger to PoS will reduce the power consumed by the blockchain dramatically, 99.95%.
“So many people think that all blockchain projects are terrible for our climate by design,” Lia Holland said that in a press release. She is the campaigns and communications manager at the advocacy non-profit group Fight for the Future.
“The Ethereum Merge shows real action from one of the largest chains to reduce its energy usage to 1/1000th of its former consumption.”
Enabling PoS reduces the new ETH supply by 90 percent. According to some supporters, this is comparable to three Bitcoin half-life events. It means the amount of ether that is mined every day will decrease from 13,000 per day to around 1,600.
A single Ethereum transaction used enough energy for an average US house to be powered all week. Juunu Salovaara is the director of platform development for carbon credits cryptocurrency firm Likvidi. She says that after the merge, this energy consumption will be equivalent to boiling water.
“In terms of energy consumption, it will now sit alongside other protocols that are considered sustainable, such as Tezos, Solana and Algorand,” He said. “Given it’s still the second biggest blockchain in the world by a big margin, it presents an opportunity for sustainable blockchain projects looking for a home.”
How do you scale?
Most people believe that the Merge will reduce gas costs. “This is not true,” said Steven Walbroehl, Co-Founder & CTO of Halborn. “It is a change of consensus mechanism, not an expansion of network capacity, that would result in lower gas fees.”
Alex Connolly is the chief technology officer at Immutable X, a NFT platform and Ethereum layer-2 scale-up solution.
“Currently, the primary scalability bottleneck on Ethereum’s total transaction processing is the cost of data availability for rollups,” Connolly wrote in a post on his blog Monday. “The near-term (2023) scalability updates are mostly mechanisms to reduce this cost.”
Those include a proposal to reduce the cost of data through the storage of data blobs — a data type that holds binary data — on beacon nodes for a short period of time.
Connolly added that an alternative would be to decrease the price of data, by allowing only certain subsets of data to be stored on nodes via sharding. In Ethereum, the term sharding refers to a process that spreads the network load by dividing the data between 64 shards.
Ethereum is a slow-moving platform, so it’s hard to say when this will happen.
It has been a long time coming
Ethereum announced its intent to move to PoS shortly after the launch of its cryptocurrency in 2015.
It has taken a long time for the transition to be completed. This was attributed to constant delays, which were at first attributed to the fact that the team needed more time to plan, much to dismay of users.
This gave Vitalik Buterin, the founder of Ethereum, enough time to write various articles based on his experiences during those years. These will appear in a new book published later this month.
Launched in December 2020 is the Beacon Chain – the main mechanism of this new network. It was one of many milestones that led up to this event. Ethereum is now running a PoS Chain (Beacon Chain), as well as a PoW change.
Goerli — Ethereum’s third and final testnet — was one of the last hurdles for the chain to jump through before its final transition to PoS, doing so at the start of last month.
Merge is not only a symbol of integration, but it’s also a huge win for the people who contributed code to the Merge over the past years.
Because the Beacon Chain has been running for almost two years — there have been mainnet shadow forks and 3 live testnet merges — the duration and frequency of the testing greatly increased the likelihood of success, Mark Connors, head of research at 3iQ Digital Assets, told Blockworks.
What are the possible risks?
Merge risks include any unanticipated technical issues or material changes in the gas fee. Some people are more accepting of this change than others, even though they have contributed to the stability of the PoW system.
One concept that challenges the move to PoS and threatens the miners’ livelihood is the Controversial ETHW PoW Fork. It will be launched within 24 hours after the Merge.
According to analysts, the vast majority of companies are still planning to proceed with the merger, despite some minor glitches that can be resolved by developers.
“The Ethereum foundation’s $1 million reward for programmers that found bugs is one example of the amount of focus and energy on nailing this effort,” Connors said.
Fundamentally, a great deal of things have changed now for ETH token owners and the Ethereum community. In the months following the Merge, the debate over whether Ethereum can flip Bitcoin will continue. Until now, it is still to be seen. You can find more Blockworks coverage of the Ethereum Merge by clicking here.
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