What is Ethereum Merge?

StuTEK Blog Image

The second-most popular cryptocurrency in the world will switch to a more effective and ecologically friendly proof-of-stake model with the Ethereum Merge, which is the official combining of Ethereum’s proof-of-work blockchain with its new proof-of-stake Beacon Chain.

The long-awaited Ethereum 2.0, as it is commonly known, will propel the blockchain forward and immediately address some of Ethereum’s biggest problems—though not as many as you might assume.

What Is the Ethereum Merge? Why Is Ethereum Merging?

Ethereum has long employed a proof-of-work consensus methodology, similar to Bitcoin. Crypto miners must devote extraordinary amounts of processing power to Proof-of-Work in order to match the intricate hashes (an alphanumeric string) that connect each block in the Ethereum blockchain. Crypto miners create larger and more potent mining rigs in an effort to identify the hash as finding it becomes more challenging as there is more hardware processing power on the network.

The Ethereum network currently uses more energy than the entire Netherlands does in a year—over 110TWh. Bitcoin, which uses more than 150TWh, is the only other blockchain that uses more energy. PayPal only uses about 0.25TWh of energy annually, but YouTube uses more than 240TWh.

The new Ethereum Beacon Chain will use 99.9% less energy after switching to proof of stake. Given that one of the primary critiques of cryptocurrencies in general, and specifically NFTs (many of which are produced on the Ethereum blockchain), is gratuitous energy waste, it is likely to be highly received that the Merge will address one of the biggest consumers.

Will Ethereum 2.0 Be Faster Than Ethereum 1.0?

Ethereum 2.0 promises to address more than just energy consumption. Similar to Bitcoin, Ethereum also has somewhat sluggish transaction confirmation times in the cryptosphere, taking up to five minutes to process 20 transactions (albeit this is still far quicker than Bitcoin’s 10-15 minutes).

It is anticipated that confirmation speed will rise after the Merge, albeit somewhat.

This is due to the fact that, despite the fact that a proof-of-stake network typically processes transactions much more quickly than a proof-of-work network, Ethereum 2.0 will continue to only release new blocks at intervals of about 12 seconds after the Merge, which is just two seconds faster than Ethereum 1.0.

Therefore, those expecting Ethereum 2.0 to suddenly transform Ethereum transactions into something akin to Nano should reconsider.

Will Ethereum Gas Fees Decrease After the Merge?

Sadly no. Even if gas costs are one of Ethereum’s biggest problems, the proof of stake Beacon Chain won’t make them go down.

There are now techniques to lower your Ethereum gas costs, and adopting layer 2 Ethereum solutions like Polygon, Loopring, and Arbitrum can also help. Users won’t experience a decrease in on-chain gas, though, until Ethereum 2.0 introduces blockchain sharding.

Can I Stake Ethereum After the Merge Completes?

Of course, but. And that “but” is that you now need at least 32 ETH, which is a large amount of cryptocurrency, in order to solo-stake on Ethereum. By processing transactions, those who stake a total of 32 ETH become network validators, aiding in the maintenance and security of the Ethereum network. There are currently about 420,000 validators.

You can always join an Ethereum staking pool if you don’t happen to have 32 ETH laying around, which is what most people will do. The catch is that if you participate in an Ethereum staking pool, any winnings will be split among the other stakers. But it might still be preferable to do nothing. If you are looking for blockchain development, then StuTek is a well-reputed Blockchain Development Company with profound knowledge and experience in developing and managing decentralized solutions.

StuTEK Blog Image

While you are aware that transferring your apps to the cloud improves productivity and security, updating your legacy application can

Your Comments

Leave a Reply