Everything you need to know about The Merge
The upcoming Merge in September is a hot topic all around the crypto ecosystem. But what exactly is the Merge? Here’s everything you need to know about the transition to Ethereum 2.0
Ethereum
Ethereum is an open-code blockchain based on smart contracts. Using the same concept of decentralized transactions as Bitcoin, Vitalik Buterin founded a new global and decentralized network for currencies and new kinds of applications. What’s unique and disruptive about Ethereum is that users can build multiple applications to run on this blockchain.
Ethereum allowed the Decentraliced Finances ecosystem to emerge!
The Merge
In words of the Ethereum Foundation:
“The Merge represents the joining of the existing execution layer of Ethereum (the mainnet we use today) with its new proof-of-stake consensus layer — the Beacon Chain.”
Now in simpler words, “The Merge” is an expression inside the ecosystem that refers to the transition from the “proof-of-work” consensus mechanism to the “proof-of-stake” consensus algorithm.
Since its creation, Ethereum runs on PoW, a system that secures the network through “miners” who purchase and run the mining hardware. The miners consume electricity in exchange for block validation and a portion of transaction fees. Even though this system is trusted by the community because of its proven security history it has some cons:
- It consumes lots of energy. In 2021, the carbon emissions produced by Ethereum transactions got to 47 million tonnes.
- It’s lack of scalability. The network can only support 30 transactions per second, which causes delay and congestion.
In the PoS model, Ethereum is secured by “validators” who stake ETH to validate the network. This system consumes less energy — the transition aims to reduce the power consumption by 99% — and it is far more scalable — Ethereum 2.0 promises up to 100,000 transactions per second.
The transition is complex, which is why the Ethereum developers decided to divide the process in two. First, they launched the “Beacon Chain”, a second parallel PoS chain to test it. The second step of the process refers to the merge between the Beacon Chain and the PoW Ethereum Chain. This event is estimated to occur between September 15th and 16th.
This is one of the most important events in crypto history so it will naturally bring second thoughts and anxietys within the community. Are you excited about Ethereum 2.0?
Are you ready to enter the blockchain? Contact us at business@rebloxsolutions.com
