Home Ethereum What is Ethereum Merge?

What is Ethereum Merge?

0
What is Ethereum Merge?

Recent interest in crypto has not been driven by any particular coin, with the exception of last year’s periods of excitement around Shiba Inu and Dogecoin.

Instead, it is NFTs that have piqued the most public interest, while DeFi may also pique curiosity. But, when people initially search for these topics, they don’t google a specific blockchain.

That means NFT and DeFi-related crypto that has network effects has a big advantage, and that means Ethereum.

That said, Ethereum’s dominance is not guaranteed and it has ceded some market share to its competitors. Solana has taken a slice of the NFT action, and protocols such as Cardano, Avalanche, and Fantom offer other alternatives.

If this trend were to continue, dominance could become more evenly distributed among the various chains, but Ethereum is now approaching a hugely important event known as Merge, which will change how it works and could start paying off the criticisms raised around it. performance. and efficiency.

What is Merger?

Essentially, fusion is the process by which Ethereum will move from a proof-of-work (PoW) protocol to a proof-of-stake (PoS) protocol. This actually means that the Beacon chain (a PoS consensus layer that coordinates the network) merges with the Ethereum mainnet (which is PoW), and the entire network will switch to PoS.

The PoS model maintains decentralization and enables the upcoming upgrade to Ethereum, known as sharding. This implementation or sharing increases transaction throughput, which means Ethereum can scale, thereby reducing gas fees for the end user.

In real terms, if you asked most people what the biggest problem with Ethereum is, they would probably say, gas costs. Merging by itself does not solve this problem, but it is a necessary step that then solves the problems of scale and gas costs.

The blockchain trilemma

There is something to keep in mind here, called the block chain trilemma. This idea, first defined by Ethereum co-creator Vitalik Buterin, states that a blockchain should be three things: decentralized, secure, and scalable. This balanced combination proved difficult to achieve.

Ethereum is already decentralized, but the merger, moving to PoS, is touted as enabling even higher levels of network distribution. By being more decentralized, network security is enhanced. And as mentioned, after merging comes sharding, through which scaling is made easier.

If everything works as expected, the end result will be that the blockchain trilemma is resolved, and Ethereum achieves the ideal of being decentralized, secure and scalable, and on top of that we can add that it will be energy efficient.

Environmental problems

This last point, energy efficiency, could be important. This week again, a committee of the European Parliament voted against getting closer to a ban on PoW blockchains (which would include Bitcoin), and the reason PoW was a problem is because it’s considered environmentally harmful.

This criticism is debatable and, in the end, the vote went in favor of PoW. Still, it would be beneficial not to have to worry about more attention around this point, and a move to PoS ensures that there will be no future worries in this regard.

When will the merger take place?

There is currently speculation that the merger will occur around June or July this year, with several indicators suggesting this is a likely scenario, although nothing is confirmed.

One clue is that the final merge testnet, called Kiln, is now live, as announced this week by Ethereum developer Tim Beiko.

And then there is an explanation in a month of February presentation by an Ethereum researcher named Danny Ryan, explaining that “the trouble bomb is about to go off, to start hitting, sometime in June, sometime in July.”

Ethereum difficulty bomb is a way to encourage miners to switch to PoS by increasing the difficulty of mining PoW, and it will be implemented when the merger takes place.

After the merger

If the process goes smoothly, it puts Ethereum in a strong position. The merger is one step in a process to resolve the blockchain trilemma, but it is a critical step and will signal that Ethereum’s status as the dominant web3 blockchain is deserved and sustainable.

With its first-mover advantage, eclectic ecosystem, and ability to attract developers, there would be less reason for crypto projects to opt for one of Ethereum’s rivals. And all of this would be done while staying true to the crypto ethos, in which decentralization is paramount.

As noted, the merger will not immediately solve the gasoline cost problem. In fact, if there was a sudden increase in activity on the Ethereum network due to increased interest, gas consumption could increase. However, after merging comes sharding, scalability, and ultimately lower transaction costs.

As crypto moves closer to mainstream adoption and web3 becomes a reality, participants will be looking for a frictionless user experience. In this case, we won’t want to spend time figuring out what’s going on under the hood, and merging can be an important step to make sure we don’t have to.

Recent interest in crypto has not been driven by any particular coin, with the exception of last year’s periods of excitement around Shiba Inu and Dogecoin.

Instead, it is NFTs that have piqued the most public interest, while DeFi may also pique curiosity. But, when people initially search for these topics, they don’t google a specific blockchain.

That means NFT and DeFi-related crypto that has network effects has a big advantage, and that means Ethereum.

That said, Ethereum’s dominance is not guaranteed and it has ceded some market share to its competitors. Solana has taken a slice of the NFT action, and protocols such as Cardano, Avalanche, and Fantom offer other alternatives.

If this trend were to continue, dominance could become more evenly distributed among the various chains, but Ethereum is now approaching a hugely important event known as Merge, which will change how it works and could start paying off the criticisms raised around it. performance. and efficiency.

What is Merger?

Essentially, fusion is the process by which Ethereum will move from a proof-of-work (PoW) protocol to a proof-of-stake (PoS) protocol. This actually means that the Beacon chain (a PoS consensus layer that coordinates the network) merges with the Ethereum mainnet (which is PoW), and the entire network will switch to PoS.

The PoS model maintains decentralization and enables the upcoming upgrade to Ethereum, known as sharding. This implementation or sharing increases transaction throughput, which means Ethereum can scale, thereby reducing gas fees for the end user.

In real terms, if you asked most people what the biggest problem with Ethereum is, they would probably say, gas costs. Merging by itself does not solve this problem, but it is a necessary step that then solves the problems of scale and gas costs.

The blockchain trilemma

There is something to keep in mind here, called the block chain trilemma. This idea, first defined by Ethereum co-creator Vitalik Buterin, states that a blockchain should be three things: decentralized, secure, and scalable. This balanced combination proved difficult to achieve.

Ethereum is already decentralized, but the merger, moving to PoS, is touted as enabling even higher levels of network distribution. By being more decentralized, network security is enhanced. And as mentioned, after merging comes sharding, through which scaling is made easier.

If everything works as expected, the end result will be that the blockchain trilemma is resolved, and Ethereum achieves the ideal of being decentralized, secure and scalable, and on top of that we can add that it will be energy efficient.

Environmental problems

This last point, energy efficiency, could be important. This week again, a committee of the European Parliament voted against getting closer to a ban on PoW blockchains (which would include Bitcoin), and the reason PoW was a problem is because it’s considered environmentally harmful.

This criticism is debatable and, in the end, the vote went in favor of PoW. Still, it would be beneficial not to have to worry about more attention around this point, and a move to PoS ensures that there will be no future worries in this regard.

When will the merger take place?

There is currently speculation that the merger will occur around June or July this year, with several indicators suggesting this is a likely scenario, although nothing is confirmed.

One clue is that the final merge testnet, called Kiln, is now live, as announced this week by Ethereum developer Tim Beiko.

And then there is an explanation in a month of February presentation by an Ethereum researcher named Danny Ryan, explaining that “the trouble bomb is about to go off, to start hitting, sometime in June, sometime in July.”

Ethereum difficulty bomb is a way to encourage miners to switch to PoS by increasing the difficulty of mining PoW, and it will be implemented when the merger takes place.

After the merger

If the process goes smoothly, it puts Ethereum in a strong position. The merger is one step in a process to resolve the blockchain trilemma, but it is a critical step and will signal that Ethereum’s status as the dominant web3 blockchain is deserved and sustainable.

With its first-mover advantage, eclectic ecosystem, and ability to attract developers, there would be less reason for crypto projects to opt for one of Ethereum’s rivals. And all of this would be done while staying true to the crypto ethos, in which decentralization is paramount.

As noted, the merger will not immediately solve the gasoline cost problem. In fact, if there was a sudden increase in activity on the Ethereum network due to increased interest, gas consumption could increase. However, after merging comes sharding, scalability, and ultimately lower transaction costs.

As crypto moves closer to mainstream adoption and web3 becomes a reality, participants will be looking for a frictionless user experience. In this case, we won’t want to spend time figuring out what’s going on under the hood, and merging can be an important step to make sure we don’t have to.

LEAVE A REPLY

Please enter your comment!
Please enter your name here