There’s been a lot of buzz around the Ethereum Merge – the mainnet merging with the Beacon Chain; the move to the Proof-of-stake consensus mechanism.
And finally, on September 15, 2022, it happened.
This blog post delves into what Ethereum merge is, its benefits, and more.
Let’s get started.
What is Ethereum Merge?
Until some time back, the Ethereum mainnet network operated on the Proof-of-Work consensus method. Under this mechanism, the miners solve complex cryptographic equations to receive rewards depending on the amount of computational power and resources expended. On the flip side, the PoS consensus mechanism requires validators to stake Ether. It obviates the need for mining which uses an enormous amount of electricity, as in the PoW mechanism.
In the PoS mechanism, when a participant validates a transaction, other nodes in the network confirm it. If the majority of the nodes confirm it and the new block is added, the validator receives a reward in Ether. The amount of reward received is proportional to the amount of Ether staked in the network.
The Ethereum mainnet, or main network, has merged with Beacon Chain, which previously existed as a separate chain and operates on the Proof-of-Stake mechanism, as a result of the Ethereum Merge. Now, the mainnet and beacon chain exist as one and use the PoS mechanism.
Benefits of the Ethereum Merge
While the Ethereum Merge offers various benefits, the most noteworthy is the transitioning of the Ethereum mainnet from Proof-of-work to the Proof-of-Stake consensus method. Since PoS does not involve mining processes, it has resulted in cutting down the energy consumption of the Ethereum network by almost 99.95%. In addition, it has opened the gateway for improving the core infrastructure of the Ethereum blockchain.
The considerable reduction in energy has led to potential climate benefits for the industry, as a whole.
Secondly, in Proof-of-Work, regarding the security of the network, an attacker needs 51% of the blockchain’s value to take control. In the case of Ethereum earlier, with the PoW mechanism, you need $5 billion to buy all computers and equipment to connect all the grids and carry out the attack. On the flip side, in the case of PoS, the attacker would need $20 billion to gain the majority and carry out the attack. And, this number is expected to grow tremendously. Moreover, even if we suffer a 51% attack in PoS, it would be easy to identify the attacker and eliminate them from the network.
Therefore, from a security standpoint, PoS is more robust, thereby making the Merge more invincible.
Finally, in addition to the eco-friendly PoS and greater security of the network, The Merge will also play a significant role in the development of decentralized applications (dApps), decentralized finance (DeFi) protocols, and the non-fungible tokens (NFT) segments. Furthermore, with the vast expanse of potential that Ethereum holds, the Merge will also offer huge opportunities for the growth of the crypto industry and Web3.0 projects, thereby contributing to a positive climate.
The Merge, which marks the combining together of the Ethereum Mainnet and the Beacon Chain, with the implementation of the Proof-of-Stake mechanism, is a path-breaking transformation in the blockchain industry. It offers multiple benefits and will be a harbinger of many more developments to come.