The long-awaited upgrade to Ethereum occurred at block height 58,750,000,000,000,000,000,000, unifying the Proof of Stake, ‘Eth2’ Beacon Chain consensus layer with the Proof of Work mainnet and execution layer.
A software upgrade to one of the most popular crypto platforms, Ethereum, was made public last week.
The upgrade – known as “the Merge” – has undergone several delays since it was first announced back in 2014.
Many have questioned whether an alternative, energy-efficient consensus strategy for the industry will ever be implemented.
Crypto has been waiting for a recalibration towards sustainability: one that not only optimizes the value proposition that crypto and blockchain applications present for crypto users but also for Web3 climate innovators, the new generation of environmental advocates, and US climate efforts more broadly.
If the run-up to the Ethereum Merge progresses without a hitch, it will take place around 13–15 September. This migration would shift Ethereum – which serves as the technological pillar for thousands of Web3 projects and 71 million Ethereum-based crypto wallets – from its current Proof-of-Work (PoW) system to a Proof-of-Stake (PoS) system. See the explanation below.
According to the Ethereum Foundation, such a move would reduce the network’s energy consumption by 99.95%, laying the groundwork for further improvements to its core infrastructure. On a higher level, an Ethereum merger could change the narrative of an entire industry when it comes to potential climate benefits.
What are Proof of Work and Proof of Stake?
PoW and PoS are protocols designed to validate transactions and keep blockchain networks decentralized and secure. “PoW” is the mechanism Bitcoin uses to regulate block creation and network integrity throughout the mining process. PoS is an alternative consensus mechanism that delegates control of the network to specific token holders. PoW has long been criticized for its energy intensity.
Why Is the Ethereum Merge Important?
The Ethereum merger is a milestone in the history of cryptocurrencies. Justin Drake, one of the leading Ethereum researchers who led the transition, said: “An attacker needs 51% of the value of the blockchain to [control].
Powered by Ethereum: We need on the order of $5 billion to buy enough computers and transformers to be able to plug them all in and launch an attack. “With Proof of Stake [the system that Ethereum will transition to when it merges], we currently have about $20 billion in financial security, and I think that number will increase dramatically.” Another interesting thing about the Ethereum merger is that, with Proof of Stake, if you get 51% attacked, you can pinpoint the attacker and remove them from the system. In addition to enhanced security and more robust anti-fraud guardrails, the outcome of the Ethereum merger will affect the broader portfolio of tools and services that run on Ethereum blocks. Decentralized applications (dApps), decentralized finance (Defi) protocols, and millions of non-fungible tokens (NFTs) rely on chains. Given how vast and influential Ethereum is, this transition could have a knock-on effect on the direction cryptocurrencies and the broader Web3 industry are headed, contributing to positive climate action.
However, it is important to note that the Ethereum merge is not everything. The Ethereum Foundation plans to implement several subsequent phases. According to Ethereum co-founder Vitalik Buterin, the foundation will work on “The Surge, The Verge, The Purge, and The Splurge” to make Ethereum faster, safer, and more decentralized. I am aiming for “By the end of this roadmap, Ethereum will be a more scalable system… Ultimately, Ethereum will be able to process 100,000 transactions per second.
What was The Merge?
The Merge was the joining of the original execution layer of Ethereum (the Mainnet that has existed since genesis) with its new proof-of-stake consensus layer, the Beacon Chain. It eliminated the need for energy-intensive mining and instead enabled the the network to be secured using staked ETH. It was a truly exciting step in realizing the Ethereum vision—more scalability, security, and sustainability.
What does increased sustainability mean for cryptocurrencies?
A successful transition to PoS will give regulators the power to adapt in a way that the crypto industry prioritizes the well-being of the planet. It will be a big signal that there is Considering the White House Office of Science and Technology Policy (OSTP) report on the climate and energy impacts of crypto assets in the US, the Ethereum merger will facilitate further research and collaboration between the crypto industry and an active Congress. There is a possibility.
OSTP said in a report, “Federal agencies will provide technical assistance and initiate collaborative processes with states, communities, the cryptocurrency industry, and others to develop effective, evidence-based environmental performance standards.” We need to. ” Other recommendations include strengthening energy reliability in the light of evaluation and crypto-mining projects; setting energy efficiency standards; and conducting research and monitoring. The assessment shows that the White House recognizes that cryptocurrency mining can contribute to the nation’s clean energy transition.
Alongside the Ethereum merger, this recognition should act as an incentive for PoW-based applications and miners to use clean, renewable energy sources. This will attract lucrative funding from ESG-conscious corporate leaders interested in green investments. Similarly, sustainable cryptocurrency mining is a necessary regulation to expand and expand the industry’s ability to create valuable jobs, build wealth, and realize its full potential as an urban developer. I also need help. In keeping with his climate-positive Web3 innovations, the potential for further expansion in this area remains.