This article tries to answer all the questions $ ETH HODLers might have regarding (possibly) the most significant update in blockchain history.
What is the union?
Here’s how the Ethereum Foundation explains the merge:
“Merging represents the merging of Ethereum’s existing execution layer (the Mainnet we use today) with its new proof-of-stake consensus layer, the Beacon Chain. Eliminate the need for energy-intensive mining and instead protect the network by using ETH in staking. A truly exciting step in realizing the Ethereum vision: more scalability, security and sustainability.
“It is important to remember that initially the Beacon Chain was shipped separately from Mainnet. Ethereum Mainnet – with all its accounts, balances, smart contracts and blockchain status – continues to be protected by proof-of-work, even as the Beacon Chain operates in parallel using proof-of-stake. Merger approaches as these two systems finally merge and proof-of-work is permanently replaced by proof-of-stake.
“Let’s consider an analogy. Imagine that Ethereum is a spaceship that is not yet ready for interstellar travel. With the Beacon Chain, the community built a new engine and reinforced hull. After significant tests, it is almost time to hot replace the new engine with the old flight vehicle. This will merge the new, more efficient engine into the existing ship, ready to enter some serious light-years and take on the universe.“
Why is union important?
There are two main reasons:
- to make the Ethereum network use much less energy
- to prepare the Ethereum network for future protocol updates (such as sharding)
Here’s what the Etheruem Foundation has to say about the upcoming change in Ethereum’s power consumption:
“Ethereum’s power consumption will be reduced by approximately 99.95% following The Merge from proof-of-work (PoW) to proof-of-stake (PoS). After The Merge, Ethereum will use significantly less carbon to be safer.
“Since its inception, Ethereum has aimed to implement a proof-of-stake consensus mechanism, but doing so without compromising Ethereum’s vision of being a secure, scalable and decentralized blockchain has required years of focused research and development.
“Therefore, the network started using proof-of-work consensus. Proof-of-work consensus requires miners to use their own computer hardware to solve a puzzle. Solving the puzzle proves that the energy was spent by the miner, showing that they invested real-world value for the right to add to the blockchain.
“Both proof-of-work and proof-of-stake are just mechanisms for deciding who should add the next block. Exchanging proof-of-work for proof-of-stake, where the real invested value comes from ETH staked directly into a smart contract, eliminates the need for miners to burn energy to add to the blockchain. Therefore, the environmental cost of securing the network is drastically reduced.“
When does the merger take place?
On August 24, 2022, the Ethereum Foundation made an interesting announcement on its blog regarding the date of the merger.
Ethereum Foundation first explained how Merge differs from previous Ethereum protocol updates (or hard fork):
“Merge differs from previous network updates in two ways. First, node operators must update both consent level (CL) and execution level (EL) clients in tandem, rather than just one of the two. Secondly, the update is activated in two phases: the first, called Bellatrix, at a period height on the Lighthouse Chain, and the second, called Paris, after hitting a
Total Difficulty run level value.“
The merger “must first be activated on the Beacon Chain with the Bellatrix update”, which is scheduled for epoch 144896 on the Beacon Chain, which is 11:34:47 UTC on September 6, 2022. Hence, “the proof-of chain -work will migrate to proof-of-stake after reaching a specific total difficulty value “5875000000000000000000 and is expected to occur between September 10th and September 20th.
What are the risks of the merger?
Leading Ethereum developers have successfully performed the full Merge update across multiple testnets, so everything should go smoothly. However, even if technical issues arise when Merge update is performed on Ethereum Mainnnet (the Ethereum blockchain that stores data on every transaction since genesis, no transaction or user fund should be lost (as all of this data is supported). up) and the main Ethereum developers should be able to fix any problems fairly quickly.
Do holders of $ ETH need to do anything to prepare for the merger?
No. So if someone offers to help you prepare your Ethereum wallets for merging, it is extremely likely that you are talking to a scammer.
How much faster will the Ethereum network become after the merger?
There will only be a slight increase in network speed as the time to process a new block is decreasing from 13 seconds to 12 seconds.
How much cheaper will Ethereum transactions become after the merger?
This update does not solve the problem of high gas tariffs when the Ethereum network becomes very busy.
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