The crypto industry is excited about “the Merge.” The Merge already took place, and proponents say it could increase prices in the long run and significantly change the future of cryptocurrencies. Here is a look at the important things you need to know about the Merge.
What Is the Ethereum Merge?
The Merge of Ethereum Merge as it is referred to is an upgrade to the Ethereum blockchain. Ethereum is the blockchain behind the second largest cryptocurrency and other technologies in the crypto landscape, including non-fungible tokens (NFTs). There will be a change in how crypto transactions take place on the Ethereum blockchain after the Merge.
Before the merge, the Ethereum blockchain runs on the Proof-of-Work (PoW) model. With the upgrade, Ethereum will be transitioned to the Proof-of-Stake (PoS) model. The PoS model is a more environmentally-friendly and energy-efficient system.
Read more: Proof-of-Stake explained
When Did the Merge Happen?
After several delays, the Ethereum Merge finally took place on September 15, 2022, as tweeted by Vitalik Buterin, the co-founder of Ethereum. The transition, according to proponents, enables the Ethereum network to lower its energy consumption by almost 99%. The Bitcoin network uses the PoW model, which requires a lot more energy than the PoS model.
Crypto transactions harm the environment, and this has been top in the mind of advocates and critics alike. PoS is less energy-intensive, and Ethereum’s upgrade is seen as a significant advance. This shift will also lay the foundation for other elements of the network's roadmap, like improving transaction efficiency.
Why Is It Called a Merge?
Ethereum has a PoS network known as Beacon Chain. Beacon Chain was introduced in 2020. The full transition of Ethereum to PoS requires the merge of Ethereum’s PoW Mainnet (the “Execution” layer) with Beacon Chain (the “Consensus” layer).
The Merge represents the formal deployment of the Beacon Chain as the new consensus layer to the existing Mainnet execution layer. With the Merge, mining on PoW will not remain a valid means of producing blocks, and validators will be assigned to secure Ethereum Mainnet.
Instead, blocks will be proposed through the validation of nodes that have ether staked to earn the privilege to take part in consensus. Improvements like these set the stage for later scalability upgrades, such as sharding.
Will Ethereum Fees Reduce After the Merge?
The Merge is not expected to change Ethereum transaction fees. Ethereum’s high network fees may be addressed by future network updates like proto-danksharding and danksharding. However, these updates at the earliest won’t be available until 2023.
Rollups remain the main salve of the transaction fee of Ethereum. Rollups are third-party networks like Optimism and Arbitrum that group together transactions and carry out their processing outside of Ethereum's Mainnet.
What Is Ethereum’s Roadmap After the Merge?
Just as they did before, Ethereum’s core developers will continue to work on the open-source network after the Merge. Improvements to security, speeds, and network fees are slated for the coming months and years.
Post-merge, sharding is one focus for developers. Sharding aims to decrease Ethereum fees and expands its throughput by spreading network activity across several “shards.”
Enshrined proposer builder separation (PBS) is also on the roadmap. With PBS, the "builders" who add transactions to blocks will be separated from the "proposers" who submit them for network-wide approval.
The Ethereum Merge has already happened. Eagerly
anticipated by the crypto community, proponents say we should expect changes in
the price of cryptocurrencies in the months ahead.
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