Ethereum Merge- All you need to know
- 2 mins
Between September 13 and 15, 2022. the most anticipated event in crypto history that changed the world view on crypto’s power consumption happened..
Ethereum, the second largest Blockchain network in the world, was operating a Proof-of-Work system since its inception and has now experienced a transitional shift to a Proof-of-Stake system this Morning. Marking a major milestone in the Ethereum 2.0 full release road map. This event known as the “Merge”, & rightly so, as the previous PoW system was called the “Ethereum Mainnet” joined the” Beacon Chain” proof-of-stake system.
This event was a HUGE deal for the Crypto community as users had anticipated that the merge will somewhat lower the notoriously high Ethereum gas fees considering that the Merge will accelerate Ethereum’s transaction speed.
Now, we know there is a lot of noise around the Merge, from Crypto Twitter, Fanboys & girls & also technical analyst enthusiasts.
So, in this article, we’ll try to answer some of the questions you may have on the recently concluded Merge and how it affects your interactions across the Ethereum ecosystem.
__ Why is it called the Merge? __
Up until September 15. 2022, Ethereum transactions are majorly done on its “Mainnet”, which runs on the PoW (Proof of Work) system pioneered by Bitcoin, which arguably consumes a lot of electrical power.
The network has decided to reduce its ecological footprint by switching to a Proof-of-Stake (PoS) system for verifying its crypto transactions. The PoS system will depend on users of the Ethereum network to validate its blockchain transactions.
__What is the big difference between PoS & PoW? __
The PoW system has miners competing to add blocks to the Ethereum blockchain by solving difficult cryptographic puzzles ( as is done on the Bitcoin Network)
The PoS system will rely on users (validators) who have staked (locked up) a minimum of 32ETH on the network to add the blocks to the blockchain. This user selection will be random across the network, so users with higher stakes ( >32ETH) will have more chances of being chosen.
The miners/validators who are successful are rewarded with transaction fees & newly minted ETH.
Read more: Proof of Stake VS Proof of Work.
__Will Transaction Fees reduce now? __
Users can only hope & maybe pray 😁
Gas fees will not be lowered due to the merge, although there are speculations on future updates like “sharding” is expected to somewhat reduce the high gas fees on the network.
But these updates aren’t expected until at least 2023.
__Will transaction speed increase now? __
Yeah, but not expressly
Currently, issuing new blocks takes 13 to 14 seconds on the Mainnet. After the network moves to the PoS system, blocks will now be issued in 12 seconds, not a lot of people will notice this change. The only hope for faster transactions is Vatalik Buterin’s speech at the Ethereum Community Conference in Paris on ETH 2.0 full upgrade boosting transaction speed to possibly 100,000.
Going forward, users and hodlers of ETH will not be required to move their coins or pay any fees to protect their coins during the Merge.
There will be no upgrades to ETH2 nor new coins or tokens to be bought or paid for due to the merge.
We advise that you read up on adequate information on the Ethereum Website and be on the alert for phishing emails and unsolicited messages via your social media accounts.
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