September 16, 2022, was a day of immense pride for Ethereum. It was akin to the beginning of a new era. The Merge, its software update, was launched.
Ethereum has always garnered great attention, since it is only the second platform, or blockchain, in the digital currency industry. Bitcoin was the first. The world-famous Bit Profit platform will confirm this fact!
Observing the Merge’s Behavior
As the transition to the Merge went through, Ethereum’s developers anxiously observed its behavior. So did the investors, and the skeptics.
Even the highly-reputed digital currency exchanges were tense. Therefore, they initiated a temporary suspension of trading in Ethereum-linked virtual currencies. They desired the satisfaction of knowing that everything would work perfectly.
Around 15 minutes of keen observation sufficed, to let crypto enthusiasts know that they had nothing to worry about. There were no technical issues on display. Thus, the Merge was on its best behavior!
The PoW Consensus Mechanisms
When the Ethereum network launched in 2015, it had the Ethereum Mainnet in place. This platform/blockchain operated in alignment with the proof-of-work (PoW) consensus mechanism. The network was emulating Bitcoin’s behavior.
This model involved computer systems and nodes. Everything is linked to a large network, wherein users strove to resolve complex mathematical problems. Those, who outdid their competitors, were able to create/mine a new block for a transaction. In turn, this led to the creation of new coins.
Merging with the PoS Consensus Mechanism
Now, in 2022, the Ethereum network decided to go in for the proof-of-stake (PoS) consensus mechanism. This model refers to a highly environment-friendly, and energy-efficient consensus mechanism.
An algorithm helps in selecting nodes. These specific nodes cling to more of the concerned network’s currency. Users, with stakes in the network, receive rewards. The rewards come into force over the computer power that garners rewards via the PoW consensus mechanism.
While the PoW blockchain carried the title of the Ethereum Mainnet, the PoS blockchain carries the title of Beacon Chain. Now, the Ethereum platform is a combination of Mainnet and Beacon Chain. It will change the method of conducting transactions.
The Merges New Features
Emergence of Validators
The first change that has come to the fore is the replacement of miners. Validators have taken over. The Merge’s founders select them from a group of virtual currency hoarders. However, the selected individuals must pay a specific fee, if they want to be labeled validators.
The selected validators, or computers, are competitors. Validation of a block of transactions requires providing solutions for mathematical problems. Everyone, using the platform, will be able to see these blocks.
The ETH Account
Then again, every validator must display a hoarding of at least 32 ETH, to take over the job. ETH is Ethereum’s native token.
The purchase price varies, in alignment with marketplace volatility. For instance, ETH experienced a plunge of 0.8%, recently. Therefore, the price of a single token was less than $2,000.
Consumption of Energy
Digiconomist mentioned that Ethereum used to consume 77.77-terawatt hours of energy, annually. It was equivalent to the annual consumption of energy by Chile. Similarly, every transaction occurring over the Ethereum blockchain consumed plenty of power. This power was in alignment with the average North American household’s power consumption for 6.76 days.
Thanks to the Merge, the power consumption will go below 99.95%, in comparison to earlier usage of energy. The Ethereum Foundation has confirmed this aspect. The Foundation consists of a developers’ group, responsible for the operations of the platform.
Earlier, various institutional investors had preferred to stay away from the Ethereum blockchain. It was because they had tremendous respect for ESG. The term stands for the governance of the environment, society, and corporates. These investors had incurred sharp criticism from environmental activists.
Furthermore, the carbon emissions during excessive use of power had been as bad as those in Hong Kong.
An expansion of the Bitcoin concept, the Ethereum network lends support to tremendously expensive decentralized (DeFi) systems, digital assets, and 3,000+ apps (for trading, playing games, acquiring loans, etc.).
The Merge will permit Ethereum to be an ecosystem, capable of hosting NFTs, DeFi financial services, and digital currencies. Furthermore, it will permit apps handling them to be highly scalable and secure.