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Ethereum Merge: What Is Changing With One Of The Biggest Shifts In Cryptocurrency History

Ethereum Merge: What Is Changing With One Of The Biggest Shifts In Cryptocurrency History

One of the most relevant changes to date in the crypto-economy world is imminent. In the next few hours, the long-awaited Ethereum merger will be completed The mechanism for supporting the functioning of the second most popular and most relevant cryptocurrency in the market is profoundly changing.

With this merger, known as The Merge, the blockchain Ethereum will no longer work in Proof of Work model, to work in Proof of Stake model. The latter has been tested over the past few years on a separate blockchain (beacon) that supports the currency (mainnet). Both are now on the verge of merging. About the results of the operation are still many doubts.

a Success is not 100% guaranteed.It is also not certain that the value of the token will be incorporated or that the “alternative” Ethereum will not be born from here, which will modify the value of the asset, but the tests did not exist until the last step and the potential advantages are also many.

How does Ethereum work today?

in the current form (proof of work), which is also used with Bitcoin, the computing power of each “miner” or miner is critical to solve the puzzle, validate the transaction and access the reward. Everyone can work on the same complex equations, and whoever can solve them first wins. The reward is given in the currency generated by validating new blocks. In Ether, for each validated block, 2 coins have been earned so far (about €3,200 at the current price), in addition to fees associated with transactions made by users. In Bitcoin, the reward is higher by 6.25 bitcoins per check.

How will the new model work?

a proof of stake It changes the transaction verification model and adds new blocks on the Ether blockchain. There is now a random selection process, by which it is decided who will validate the next block on the blockchain. To be eligible for selection, you must have at least 32 Ethers. This new rule is a form of guarantee that the system begins to adopt. A staking is called to withhold the required funds, which will serve as a collateral reserve, in case the task is not performed correctly.

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Will the new way to “manufacture” Ethereum use more or less electricity?

The most immediate and most relevant change for this algorithm change is precisely the power consumption required to validate Ethers. A drop of about 99% in the electric power needed to make the ecosystem work is expected, because mining is no longer paid for, and keeping thousands of machines around the world competing simultaneously for the fastest block verification no longer makes sense.

Today, the carbon dioxide emissions associated with Ethereum mining are estimated to be equivalent to those of a city like Singapore. And that the energy consumption for this activity is equivalent to that of Switzerland, which has a population of nine million people. With Bitcoin, the numbers are even scarier. The 150 TWh spent annually on bitcoin mining is more than enough to supply a country like Argentina, with a population of 45 million.

Are there any other changes planned?

Other restrictions on Eterhum are expected to change after the merger. The update scheduled for next year will pave the way for Accelerate the maximum number of supported transactions, which will also affect the costs associated with operations in this ecosystem. Transaction delays and costs are two issues with the current platform.

Does this change have security risks to the ecosystem?

The decision to change the essence of how the blockchain works is not 100% peaceful and unpredictable, and it can affect the success of the process, but it is also not impossible. In fact, it has been in the plans of the creators of Ether since the beginning (2014), but due to the complexity of the process, it only started preparing in 2020 and since then many tests have been carried out to reduce the chances of something going wrong. even so, Bugs are a real possibility in transition. Another widely discussed possibility is whether the new system facilitates or hinders potential attacks.

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As John Charbonneau, an analyst at Delphi Digital, explained to, In the current model of attacking Ethereum, someone would have to be able to control 51% of the network, which is how to say, about its computational power which is distributed by thousands of machines all over the world. It has never happened and is unlikely to happen due to the scale and costs of such control. On the other hand, the same source mentions that The capture system tied to the new Ethereum model would also allow direct financial consequences to be attributed to anyone who tried to attack the network..

Is Ethereum continuity guaranteed?

Possibility to create those unhappy with the focus of the new Ethereum OS in a group of validators Kind of an Ethereum alternative Existing. There is even information indicating moves of this type are already underway, but not much success is expected for this effort, let alone the success of the variant in relation to the original. For a coin to have value, there must be an entire ecosystem that drives it and it is unlikely that investors and Ethereum-based platforms will prefer to follow the unofficial version.

What will happen with the merger?

The merger culminates in two major updates. The first alarm was actually launched and affected. The second is imminent. It will affect the Ethereum implementation layer (Proof of Work) and will be triggered by activating an algorithm variable during its normal working process.
After the update, all blockchain-based applications and services are expected to function normally., is already compatible with the new tariffs. Several tests were done before the D-day for this to be the case. A critical element of the change is, for example, that the various programs used by the validators are properly updated, so that there is a sufficient set of these actors to continue validating the blocks.

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Will Ethereum be worth more?

The answer is not closed. It all depends from the start on how the blockchain update process goes. straight ahead. There are those who believe that this The new “environmentally friendly” version of Ether will attract many investors, Which was far from this market due to the environmental footprint of mining. There are also those who argue that changing the block validation logic will reduce the pressure to buy and sell the currency, which will have a positive effect on the currency’s appreciation, linked to the expected improvements in the ability to process transactions.

Watch the video shared by the Ethereum Foundation, where these and other questions about the merger are explained in detail.