It is believed that everyone has heard about the merger of Ethereum. After so long, at 14:42 on September 15, 2022, Ethereum's executive layer and the consensus layer of proof of equity finally opened the merger system, producing the first PoS block with a height of 15537394. Thereafter, Ethereum's consensus layer officially changed from PoW to PoS. So, what is the merger of Ethereum? What impact will the Ethereum merger bring? Next, let's have a look.
What is Ethereum merger?
Ethereum merger means that Ethereum may merge the consensus layer (POS beacon chain) with the executive layer (original POW chain), and terminate the POW part of the original chain. This upgrade represents the formal conversion of Ethereum to the POS consensus. The consensus layer can be simply interpreted as the core idea of ecology, and the executive layer can be interpreted as the actual order of ecology. When these two are completely turned into POS, it means that the Ethereum POW era is really going to become history.
It is worth noting that this merger will stop the POW verification of the original chain, and will not open the ETH previously pledged to the beacon chain, which will be opened in the first hard fork after the merger. This implies that ETH without POS issuance before opening can release the circulation, and stop the path of issuance according to the POW method, so that Ethereum can enter into stronger deflation. It can be seen that it was the merger that ended the period of POW+POS and made Ethereum fully turn into POS.
Under the POS system, the profits of Ethereum that miners can obtain will be related to the proportion of ETH pledged in the whole network ETH pledge, without the need to purchase mining machines and other hardware. This means that Ethereum POW mining will not be long away from the historical stage, and it also adds some pressure to the miners who are conducting POW mining. Therefore, this Ethereum merger will bring fundamental changes to the whole mining field, mainly in four aspects.
Reasons for Ethereum merger:
1. The slow energy consumption workload proves that (PoW) has failed to meet the market demand and can no longer operate in this way.
2. Participation is no longer just the right of large miners. Proof of rights reduces the threshold for users to add Ethereum blockchain operations.
3. Although the sale and reward verification of ETH will become less, ETH can be more applied to the operation of the community and award active participants.
What impact will the Ethereum merger bring?
1、 Ethereum will be more open, diversified and decentralized
In the era when PoW was selected, it was usually necessary to invest heavily in various equipment for mining, which not only consumed energy, but also concentrated mining opportunities on people who had the means to invest heavily.
After being converted into PoS, 32 ETH are required to participate in pledge. If you don't have 32 ETH, you can also participate through the pledge pool in the exchange. Like group buying, the exchange matches participants to reach the threshold of 32 ETH, allowing ordinary participants to participate.
The proof of equity (PoS) has a lower threshold for verification nodes, and the key is to reward all participants. Although there will also be whale players with a large number of ether coins, at least each node will have the opportunity to obtain rewards.
2、 Ethereum will greatly reduce energy consumption and become more efficient
Proof of equity (PoS) will reduce the energy demand of the entire Ethereum network by 99.95%. One verification will only consume about 40 watts of electricity, equivalent to making a pot of coffee.
On the other hand, Layer2 networks based on Ethereum are developing more and more, and Layer1 network upgrading also helps reduce the pressure on the system to process data and execute smart contracts.
3、 The overall steps can be seamlessly integrated with users and developers
The APIs used before and after the Ethereum merger and their effects on the current components (such as the Ethereum client Besu and Geth) are almost the same, and there is no need to write smart contracts again. This Ethereum upgrade will basically not lead to the pressure of technology transfer.
However, if Dapp is running, some details may need to be upgraded. Ethereum also released a test network in this part to help with subsequent solutions. It is suggested that developers retest Dapps and infrastructure to ensure smooth operation.
4、 The economic model of Ether will be more sound
Unlike in the PoW system, the issue of Ether is to subsidize the mining costs of the verifier. The PoS does not require such a large number of operating steps, so the amount of ETH will also decrease.
The Ethereum (ETH) will bring an updated encryption economic model. The Ethereum Foundation can better grasp the speed of currency circulation and its destruction. A stable currency lending system will also enable DeFi to operate more stably and reduce the economic cost of maintaining Ethereum.
Speaking of this, I believe you have a certain understanding of what the Ethereum merger is and what impact it will bring. In general, the transition of the consensus mechanism represents the departure of the Ethereum Workload Certification (PoW) and the traditional miner system. It will also enable major enterprises to see the decentralized system of the blockchain, which can be both energy efficient and has more expectations for the combination of the old and new systems. In addition, it will enable ETH, the currency system of Ethereum, to focus more on improving the currency system and developing the possibility of multiple applications. In the future, it will open up a sustainable and environmentally friendly Ethereum.