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KrisVirgo HF-06 |HFOffline

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    KrisVirgo HF-06 |HF

    2 weeks, 6 days ago

    What is The Ethereum Merge? defines The Merge as “the joining of the existing execution layer of Ethereum (the Mainnet we use today) with its new proof-of-stake (PoS) consensus layer, the Beacon Chain.” For crypto beginners, that probably made little sense, so here is a more straightforward definition: The Merge is an Ethereum software upgrade from a Proof of Work (PoW) to a Proof of Stake (PoS) mechanism. It removes the prerequisite for energy-intensive mining and replaces it with energy-efficient staking.

    Table below shows how both consensuses compare:

    proof of work vs proof of stake pow vs pos

    Here’s what Zhong, the head of research at CoinGecko, has to say regarding the important event:

    “In our view, The Merge is a culmination of years of R&D work by the Ethereum Core Developers in order to migrate the chain from Proof-of-Work to Proof-of-Stake. This upgrade seeks to improve both the security and decentralization aspects of the network, as well as significantly reduce its environmental footprint. Once the Merge is implemented, later upgrades already in the works will seek to address the scalability of the network.”

    To expound on The Merge further, let’s use an analogy of Ethereum as a spacecraft in mid-flight. The Ethereum community has created a new engine and a robust casing. After rigorous testing, it is almost time to hot-plug the new engine into the old mid-flight. The process will basically join the new, more effective engine with the existing craft.

    So why change the old engine, yet Ethereum has achieved much as a smart chain network? Well, the Ethereum Mainnet leverages a PoW consensus mechanism to confirm transactions and add them to blocks. The mechanism involves using distributed computers (nodes) to solve (mine) increasingly complex mathematical puzzles to secure the network.

    PoS uses validators instead of miners to secure the blockchain. Validators execute the same role as miners, only that instead of spending money to buy expensive and energy-intensive equipment, they stake Ether (ETH) as collateral to verify transactions on the blockchain. The staked assets can be confiscated if the validator acts dishonestly, with more severe consequences for wicked acts.

    The process rewards active and honest validators for securing the blockchain without needing colossal power consumption. According to Staking Rewards, ETH ranks as the number one crypto asset by staking market value.

    top 10 assets by staking market capSource: Staking Rewards

    Because all the power consumed securing a PoW blockchain originates from a mining algorithm, switching to PoS significantly minimizes energy use. Besides, there’s no need to use sophisticated mining equipment, eliminating the arms-race scenario and electronic waste.

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