Those in charge of the Ethereum network had spent years preparing the first of their major transformations. The event known as the ‘merge’ has just been completed and from this moment on, the network and cryptocurrency ETH have changed their philosophies. Much more efficient, which will see new changes in the future.

‘Merge’, a success. The transition from the Proof-of-Work (PoW) consensus mechanism to the Proof-of-Stake (PoS) model has been going on since 2016 and was completed after a few preliminary tests. Things are not changing much for investors and users of the Ethereum network, but for miners.

goodbye to mining. The PoW mechanism, the same as used in Bitcoin, consists of machines and computers from all over the world competing to solve complex mathematical problems and then allowing a block to be added to the blockchain. This model has become very inefficient and the switch to Proof of Stake is key to reducing environmental impact.

Hello to ‘Stake’. Instead of mining, consensus now relies on hoarding ETH on the network to have something like ‘more participation’ in that consensus. With ‘stake’, transactions are no longer validated by solving these mathematical puzzles: instead, users validate transactions based on the number of cryptocurrencies they own in the system based on their ‘stake’. And that creates doubt, eye.

And we’re done!

Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the unification happen should be very proud today.

— vitalik.eth (@VitalikButerin) 15 September 2022

Coup. According to the Ethereum Foundation, this transition will allow the energy consumption of the Ethereum network to drop by 99.95%, but also proposes future improvements for the scalability and security of this cryptocurrency and blockchain.

Players also benefit. There is another direct consequence: Graphics cards are no longer very useful for miners who use them largely to mine ETH. This has caused them to finally become available and prices to drop. Players will finally be able to update their equipment without having to pay for this extraordinary extra cost incurred years ago.

There is still work to be done. This transition is significant, but for Vitalik Buterin, the creator of Ethereum, the evolution of the network is only 40% complete. Other phases will resolve still-standing issues, such as being able to trade more and lowering the still high commissions for each trade. Still, this is a giant step that could be a turning point for Ethereum. Some say it will actually be more relevant than bitcoin, but that remains to be seen.

Image | Bastian Riccardi