The Merge is the hottest topic among the cryptocurrency community lately
Here’s everything you need to know about it. In what’s likely to be the most highly-anticipated event within the cryptocurrency community in 2022, Ethereum’s mainnet is set to merge with the Beacon Chain’s proof-of-stake system lowering its carbon footprint by 99%.
As mentioned above, “The Merge” is a term, a crypto slang, if you will, that’s used to describe the transition of Ethereum from a proof-of-work consensus algorithm to one that uses proof-of-stake. The Ethereum Foundation gives an exact definition of the term: “The Merge represents the joining if the existing execution layer of Ethereum (the mainnet we use today) with its new proof-of-stake consensus layer – the Beacon Chain.” This is designed to take care of the energy-intensive mining process while also securing the network using staked ETH. The move is expected to provide for more security, sustainability, and scalability to Ethereum’s network. Ethereum is the second biggest blockchain, behind only bitcoin, and currently emits carbon dioxide roughly equivalent to that of Singapore. If it's successful, the Merge will lower Ethereum's massive electricity requirements by over 99%. That is of huge consequence.
The current proof-of-work (PoW) model is the original blockchain process. It is a system in which computers compete with the goal of being the first to solve complex equations. This process is referred to as ‘mining’ . When a miner solves an equation before others, they are allowed to create a new block. Once everything is approved, the new block is ‘chained’ to the previous block, creating a chronological chain of transactions. The miner is then rewarded for providing their resources with cryptocurrencies.
In the proof-of-stake (PoS) system, ‘validators’ (the equivalent of miners) are chosen to generate a new block based on the number of tokens they hold, rather than letting an competition between miners determine who can add a block. Those chosen receive rewards from the blockchain in exchange. This ‘staking’ system replaces the work done by miners. This PoS structure secures the network because a potential participant must purchase the crypto-currency and then hold it in order to be chosen to create a block.
The 5 stages are:
This is the hereby discussed transition from Proof of Work to Proof of Stake following the merge of Ethereum’s current mainnet with the Beacon Chain.
This is the phase that will bring sharding to the protocol. It’s a scaling solution that would break the network into separate partitions called “shards,” designed to spread the computational load on the mainnet.
This phase refers to the introduction of the so-called “verkle trees.” It involves an upgrade to Merkle proofs and is intended to optimize data storage for Ethereum nodes.
Similarly, this upgrade also concerns data storage for validators and it will reduce hard drive space that’s required for the validators, streamlining network congestion.
This is the last upgrade in the pipeline and is intended to deliver a string of miscellaneous updates that are made to ensure the overall smoothness of how the network runs.
After the merge:
One of the promises of Ethereum 2.0 is that of scaling, and Vitalik Buterin claimed that the network will be able to process 100,000 transactions per second. However, The Merge is just the first stage of five from the protocol’s incoming development.
We hope we have informed you a bit on this very important topic and we can't wait to see what "The Merge" will bring!