Ethereum is evolving.
The world’s most popular blockchain platform is going to undergo a drastic transformation that will make it more environmentally friendly and pave the way for other enhancements. It is extremely significant for the embryonic fields of decentralized finance and NFTs; nevertheless, its immediate implications on Ethereum’s speed, scalability, and fees are frequently exaggerated. Let’s get started.
What is The Merge?
The Merge is an Ethereum platform update that will merge the Ethereum Mainnet with the Beacon Chain, signaling a shift from proof-of-work to proof-of-stake.
If you’re not into blockchain and cryptocurrency, that probably didn’t make much sense, so here’s a shorter definition: The Merge is an Ethereum update that abandons traditional mining (having strong computers solve math puzzles to operate the network and produce new currencies) in favor of a system in which holders of the underlying currency, ether or ETH, can stake it (thus proof-of-stake) to power the network.
In other simpler terms, machines that require massive amounts of electricity to run Ethereum are being phased out and replaced by processors that consume far less electricity.
When will The Merge actually occur?
The Merge has no defined date, however the process has already been completed on Ethereum test networks. Each of those test networks Merges might be viewed as a dress rehearsal for the big event. The Merge may now be enabled on Ethereum’s public blockchain after those rehearsals went smoothly. Ethereum developers have indicated that this will occur in the near future, most likely on September 15 or 16, 2022. As the event approaches, the actual time and day will become apparent.
Is The Merge risky?
The Merge is a significant update to an incredibly complicated system. Something may go wrong. Ethereum may operate slowly for a time or perhaps stop entirely. There might be additional unanticipated faults or problems. Given all of the testing that went into this event, the chances of any of this happening are modest, but not zero.
The Merge also alters the way the Ethereum network is safeguarded. Cheating a proof-of-work system is difficult since it would take a large amount of computer power. Cheating the system under a proof-of-stake system would necessitate acquiring a large sum of ETH.
Proof-of-stake, according to Ethereum’s creators, is safe, and it has been employed in numerous other important blockchains, like Solana and Avalanche, although there is some risk involved.
Finally, Ethereum is a decentralized network, which means that not all power is concentrated in the hands of the creators. The community, presumably lead by miners dissatisfied with Ethereum abandoning mining, may elect to construct a so-called fork of Ethereum that retains mining (one such fork currently exists and is known as Ethereum Classic). This split has the potential to become more popular than Ethereum itself.
If you possess ETH or an ERC-20 token on Ethereum, you will (most likely) own them in any Ethereum fork because these forks are simply replicas of the network. It is up to each user to determine which fork to continue supporting and what to do with their assets.
Who knows what the end result of this merge will be?
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