Ethereum Merge: What You Need to Know
The Ethereum merge is coming, and many people on Twitter think it’s one of the biggest things to happen to crypto. There is a lot of information surrounding this and it will definitely be a big change as Ethereum is set to move from Proof of Work to Proof of Stake.
Ethereum Merge Explained
Twitter user, @twofivedev published a Twitter thread explaining Ethereum Merge, with diagrams and drawings of beavers, “explained like your age”. Full thread available here.
Simply put, the merger will see the Ethereum ecosystem shift from PoW (Proof of Work) to PoS (Proof of Stake). PoW is a mechanism currently in use on Ethereum that allows the decentralized network to agree on things like account balances and order of transactions. It is the underlying algorithm that sets the difficulty and rules for miners to work with. Mining itself is “work”. This is the act of adding valid blocks to the chain. This process uses a lot of energy, making Ethereum bad for the environment, which has historically led to many complaints from environmentalists.
On the other hand, PoS is the consensus mechanism that Ethereum will use after consolidation. Proof-of-stake is a type of consensus mechanism used by blockchains to achieve distributed consensus. In proof-of-stake, validators explicitly deposit capital into a smart contract in Ethereum in the form of Ether.
New processes will be tested before being fully deployed. This final test was confirmed by Ethereum developers at the end of July. They said it will be held from 6th to 12th August. Now that period is over, they are all but ready to launch this merge. Watcher.guru reported that the merger is expected to be completed between September 15-16. The merger is just the beginning of their multi-year plan that will lead to the eventual announcement of ETH 2.0.
Beaver terms explained
In the thread, beaver was used to illustrate the difference between proof of work and proof of stake. The beavers using PoW were exhausted, as they all had to expend energy trying to figure out how to get their logs across a river, only one was rewarded after the problem was figured out. On the other hand, the beavers depicted in the PoS example were lying down, lazy, not all of them wasted their energy, only those who put their logs down.
Environmental changes to Ethereum Merge
Now, with Ethereum moving to PoS, it will be much better for the environment. Currently, with the proof of stake mechanism, Ethereum’s total energy consumption is about 112 TWh per year. This number is similar to that of an entire country like the Netherlands, which has a population of over 17 million.
How does the community feel?
Overall, everyone is excited about the idea of consolidation and saving energy. Some are also excited for the potential massive rise in the price of Ethereum. But it is definitely not guaranteed. Lark Davis, an investor with 1 million Twitter followers, said: “Ethereum merging is a bigger and more important event than Bitcoin halving.”
The post Ethereum Merge: What You Need to Know appeared first on NFT Evening.
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