The Merge is only one part of a series of scheduled Ethereum software upgrades.
Ethereum’s highly anticipated software upgrade, known as the Merge is set to be completed tomorrow, September 15, at about 5 am UTC. It has been described as one of the most important advancements in blockchain technology. Its impact is expected to be felt throughout the crypto industry. Here’s everything you need to know about The Merge.
The Merge – What Is It?
The Merge is only one part of a series of scheduled Ethereum software upgrades; the others being The Surge, The Verge, The Purge and The Splurge. Its goal is to transition the Ethereum blockchain from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) system making it more scalable and energy efficient.
The PoW consensus relies on “miners” to secure and validate transactions. The system has been criticized for its high energy consumption and is currently used by over 170 cryptocurrencies according to data by CoinMarketCap. PoS, however, secures the network through validators. The validators stake their Ether holdings to validate the network.
The Merge is divided into two parts – the Bellatrix upgrade, which took place on September 6, and Paris, set to take place tomorrow. The purpose of the Bellatrix upgrade was to ensure a smooth transition to PoS.
Preparing for The Merge
In December 2020, developers, in preparation for The Merge, launched the Beacon Chain. This is a PoS network that runs parallel to the Ethereum mainnet and allows users to stake Ether. The chain currently has about 13.4 million ETH staked across thousands of nodes. The Merge will join the current PoW Ethereum mainnet to this PoS chain.
The launch of the Beacon Chain was followed by the activation of the Ropsten, Sepolia, and Goerli test nets in June, July, and August respectively. All that is left now is Paris – the merging. The Merge will be triggered once the network achieves Terminal Total Difficulty the figure for which is 58,750,000,000,000,000,000,000.
What Can Happen Next?
As stated, the main purpose of the upgrade is to improve scalability and reduce the energy consumption – and thus environmental impact – of the network. It is expected that the Merge will reduce energy consumption by 99.95%. There will also be fewer ether tokens issued. Issuance is expected to drop nearly 90%, according to data from the Ethereum Foundation. If activity on the network rises, it could become deflationary, with less ether being produced than is burned.
What the Merge will not do is increase the network’s speed and lower transaction fees.