An estimation on the blog of the Ethereum Foundation claims that the merger will reduce total energy consumption by at least 99.95%, but not everyone is convinced of the advantages. We are witnessing Ethereum and its merge transition to the beacon chain.
The second-largest cryptocurrency is scheduled to switch to a more environmentally friendly model, which may attract new investors who believe that bitcoin’s model consumes too much electricity, according to the most recent countdown. Ethereum users anticipate the significant network upgrade to start around 10pm PST.
As its execution layer integrates with the novel Proof-of-Stake consensus layer known as the Beacon Chain, the Ethereum blockchain will pivot away from its energy-intensive Proof-of-Work consensus mechanism.
The alleged “Merge” is comparable to retrofitting a rocket ship after it takes off: “It is an epic engineering feat.”
It is important to note that some PoW miners who have historically mined blocks and kept the execution layer up and running have said they will continue to do so.
After the Merge, the PoS-powered Ethereum blockchain will proceed to use ETH, whereas a potential PoW Ethereum network, called ETHPOW, may split off and issue an ETHW token.
Ethereum has traded lower over the past 24 hours, largely due to yesterday’s chaos caused by the CPI, but it has stabilized today around $1600.
As the WSJ points out, Bitcoin concocted the proof-of-work model, in which a decentralized, worldwide network of computers processes transactions and adds them to the blockchain by producing random numbers in the hopes of discovering the right combination to unlock formulas.
Miners are rewarded with freshly minted bitcoins.
Validators stake their cryptocurrency holdings in the proof-of-stake model that Ethereum is transitioning to in order to validate transactions.
If the validators act deceitfully, the “staked” ether tokens serve as collateral and may be destroyed or taken away.
As compensation, the validators receive interest payments on their staked holdings.
The Ethereum Foundation estimates that staking on the Ethereum blockchain before the merge would earn a 4.1% yearly percentage rate.
Put bluntly, ethereum’s major upgrade means that verifying transactions will use a great deal less energy. Cutting energy usage by more than 99% will also significantly lower the entry barrier for institutional investors, who have been wary of appearing to be a part of the climate crisis.
If everything goes as planned, it will be bland, as One River’s Sebastian Dae observed earlier in the week, lacking the thrill of witnessing a rocket launch. Unfortunately, every layer 1 that succeeds hopes to be just that—a dull, safe platform that eventually becomes undetectable to users who expect more from their tools and is thus taken for granted. The Merge brings that possibility one step closer.
Approximately 150 developers will be placed on heightened alert to handle any potential hiccups during the actual process, which is anticipated to last 12 minutes.
We conclude by pointing out that the typical Ethereum user and ETH holder should not be concerned about losing their money or changing their favored wallets prior to the Merge. All of the funds in wallets are still available and secure because the entire history of the Ethereum blockchain is carried over during the transition.
Most importantly, watch out for cons. The three most prominent ways that malicious actors are attempting to take advantage of the Merge event have been listed by Cointelegraph. The hype revolves around fake airdrops, upgrade scams, and fraudulent staking pools. To get new tokens, you do not have to send ETH or update your wallet.
GreatGameIndia is being actively targeted by powerful forces who do not wish us to survive. Your contribution, however small help us keep afloat. We accept voluntary payment for the content available for free on this website via UPI, PayPal and Bitcoin.