Ethereum’s transition to proof of stake is among the most anticipated events in the cryptocurrency industry. “Merge “Merge” is intended to change the Ethereum blockchain away from the Proof-of-Work (PoW) consensus model to a “proof-of-stake” (PoS) method that is designed to be more efficient and faster. Efficient in terms of energy consumption. However, shifting the second largest blockchain from one to another is a complicated and multi-step procedure.
What is The Merge?
The Merge is the result of the union of the current implementation layer for Ethereum (the Mainnet we use in the present) and its new proof-of-stake consensus layer, known as the Beacon Chain. It removes the requirement for mining that consumes energy and instead protects the network using staked ETH. An exciting step toward realizing the Ethereum goal of more security, scalability, and sustainability. It’s important to note that at first, Beacon Chain was released independently from Mainnet. Ethereum Mainnet, with all of its accounts, balances, smart contract, and blockchain state, remains secured through proof-of-work while its Beacon Chain runs in parallel by using Proof-of-Stake. The coming Merge is when the two systems can join, and proof-of-work is replaced with proof-of-stake permanently.
Merge is the most significant upgrade ever made to Ethereum. On August 10, KuCoin will launch the ‘ETH-Merge Gold Rush’ celebration in preparation for the enhancement of Ethereum. At this event, customers can learn more about Merge’s latest updates and get the best opportunities to earn cryptocurrency in Merge.
Merging with Mainnet
Since its time, genesis Proof-of-work has been able to secure Mainnet. We call the Ethereum blockchain that we’re all accustomed to. It has all transactions, smart contracts, and balances since it was created on July 15, 2015.
Since the beginning of Ethereum history, the developers have been working on preparing an eventual switch from proof-of-work to proof-of-stake. As of the 1st day on December 1, 2020, Beacon Chain was created. Beacon Chain was made, which has since been a separate blockchain from Mainnet and is running in parallel.
Beacon Chain Beacon Chain has not been processing Mainnet transactions. Instead, it’s been finding an agreement on its status by settling on active validators and their balances on accounts. After extensive testing, The Beacon Chain’s opportunity to find a consensus on more is quickly getting closer. Following The Merge, the Beacon Chain will become the central engine used to reach agreement on all data on the network, including transactions in the execution layer and accounts balances.
The Merge is the official transition to Beacon Chain to be the main engine of the production of blocks. Mining is no longer the method of creating legitimate partnerships. Instead, the validators of proof-of-stake are in charge and responsible for verifying the legitimacy of all transactions and recommending blocks.
What happens following the Merge?
The primary goal of achieving Merge is to speed up the transition from proof-of-work to proof-of-stake. To make the growth faster, the developers are currently striving to eliminate aspects that could cause delays and temporarily limit the possibility of withdrawing staked ETH when the Merge is completed. But, these issues will probably be taken care of during an after-Merge “cleanup” upgrade.
When the Merge is completed, and Ethereum’s new consensus layer can take on the responsibility of adding blocks to the Ethereum blockchain using the proof of stake consensus mechanism, the developers will begin to work on new phases that they will call the Surge and the Verge as well as the Purge and the Splurge. They will work to improve Ethereum’s blockchain’s proof of stake capabilities to be flexible and secure.
What will the ETH merger mean for investors?
Experts believe the merging will boost Ethereum’s value to new heights. At 1 p.m. ET on July 18, The price of ETH is up about 10% in the last 24 hours, reaching 1,493, per KuCoin. The market cap soared to over $1 trillion in the past five weeks on Monday. This is evidence that investors feel more at peace after the rigors of the crypto winter.
The improved Ethereum system may aid in its competition with other blockchain platforms. However, investors must be wary regarding investing too much in crypto, as valuations change daily.
So, what’s the deal with the cost of gas? The trader from Defi and PoS director Vivek Raman clarified in an account on Twitter that the initial edition of Ethereum 2.0 won’t affect the cost of gas. This can be explained by the merger that changes the consensus layer in Ethereum but does not affect data availability or execution layers.
Leave a Reply