The Merge is here!
The Ethereum Merge has finally arrived following months of upgrades, developments, and a first-of-its kind transition on a blockchain of this size. The Merge is designed to offer a more-sustainable future for the second largest (by market cap) cryptocurrency, Ethereum, by substantially reducing the energy it takes to verify transactions.
The old Ethereum Blockchain has 'merged' with the Beacon Chain which was launched in 2020 to test the proof-of-stake system. This evolution has been in the works since the start of Ethereum and fits into a broader roadmap of ongoing improvements to Ethereum.
The old Ethereum Blockchain used a consensus model similar to Bitcoin, with nodes verifying transactions using a proof-of-work (PoW) model. Proof of work uses energy intensive computers to solve complex mathematical problems in order to verify transactions. Before the Merge, Ethereum was estimated to be using as much electricity as the Netherlands.
In an ambitious move to redevelop the software without ceasing trading, in a move said to be similar to be akin to changing out a petrol engine for an electric motor while a car is driving, Ethereum is now running on proof-of-stake (PoS), which requires validators to hold and stake tokens. Validators are selected at random to mine the next block and once a designated number of validators have verified the block is accurate, the next block will be created.
Validators receive rewards proportionate to their staked tokens, without having to expend large amounts of energy and makes participation in the consensus nodes cheaper and easier.
Holders of ETH and ERC-20 tokens do not need to do anything for their tokens to continue to function as normal, but a raft of scams are expected to try and trick people into handing over their private keys or transferring their tokens to scammers.
The Merge has not only revamped thousands of decentralised apps that rely on the Ethereum Blockchain, but potentially reduced the overall energy usage of the entire world by 0.2%.
Merge parties were held around the world, luckily in Australia the merge time was about 5pm AEST but many stayed awake to watch history be made:-
The network will be watched closely for any bugs or unexpected operations in the coming days but so far the Merge is being considered one of the greatest open source software successes to date.