The Ethereum merge is upon us and yet not many know much about it, what it means for Ethereum and the crypto space. In this post we explain what needs to be known by anyone and everyone who cares and doesn’t care about crypto. Lets dig in.
La fusion Ethereum (The Ethereum Merge)
Pardon my French! But that was correct. So, What exactly is the Ethereum Merge? Away from all the technicalities and big confusing crypto grammars and what nots, The Ethereum Merge is simply the Merge!
Okay lets look at it in simpler terms for our crypto newbies and everyone who may be new to crypto and then go higher for crypto OGs, experts and anyone in between.
A merge simply means joining or adding two or more separate parts to become whole thus make the whole a better version of the individual parts.
In the case of Ethereum, it means improving the Ethereum Blockchain by joining the existing execution layer (Mainnet) with the new Proof-of-Stake consensus layer (the Beacon Chain) together.
Why is the merge important?
Basically the merge seeks to transition Ethereum from its current Proof-of-Work consensus mechanism to Proof-of-Stake consensus mechanism. Dazzol! Like, That’s All! However there is more to it than just consensus mechanism upgrade.
Yeah we are going to have a shinning, effective, dynamic and more robust Ethereum Blockchain!
On a more serious note. The merge enables Ethereum become a lot better on different levels.
Proof-of-Work has arguably been energy consuming as miners who help to secure the ethereum network have to expend a lot of electricity on their mining rigs and equipment in other to do so. This is one downside of the POW consensus mechanism, which many industry players and institutional have shunned Bitcoin, Ethereum and other Blockchains for.
Proof-of-Stake reduces the amount of computational work and energy required to secure the network by allowing coin owners to validate transactions and keep the blockchain secure in return for rewards. As against POW where miners have to run their mining rigs solving complex computational problems to mine new blocks and earn block rewards and consuming a lot of electricity which isn’t eco friendly.
When is the Merge?
The exact date isn’t known however it is estimated between 10th to 20th September, 2022. All indications shows it might happen on Sep 15, 2022.
The Merge is expected to be triggered once the Terminal Total Difficulty (TTD) threshold is reached. TTD is the total difficulty threshold required of the final block mined in Ethereum. So to say, TTD represents the fixed number of hashes that are left to mine until Proof-of-Stake officially kicks in.
There are quite a handful of implications of the merge which include:
A switch from POW to POS consensus mechanism for Ethereum making is all the same very distinguished from Bitcoins POW mechanism.
It means that Ethereum becomes more difficult to be attacked because of the higher economic security.
There wont be miners on the Ethereum blockchain, only Stakers and Validators. The gaming market will be flooded with GPUs.
It arguably makes Ether a deflationary cryptocurrency.
Institutional flow is likely to happen as the merge make ETH more eco friendly and this is a drag for institutions.
There are Misconceptions about the merge
Misconception: To Run an Ethereum Node you will need to stake 32 ETH
Not before or after the Merge, anyone is free to run their own updated copy of Ethereum for free.
Misconception: Gas fees will be reduced
No way are gas fees going to be reduced, its just a change in consensus mechanism.
Misconception: Transactions will be faster
There are likely going to be some slight increase but mostly transaction speed will be the same as its still same layer 1 Ethereum.
Misconception: Downtime of the chain because of the merge.
There will be no downtime whatsoever as this is simply an upgrade to proof-of-stake POS
What you need to do before and after the Merge
You actually do not need to do anything before or after the merge, simple keep your cool have your ETH in ur wallets, Liquidity Pools or in ur favorite Defi Protocol relax and chill. That’s all y’all need to do.
We will bring you the latest as the merge approaches. Watch this space…