The Ethereum Merge is perhaps the most anticipated event in the crypto world this year. Investors, builders, participants, and enthusiasts have several expectations in the aftermath of the merge. Some anticipate the merge as they believe it could spell an end to the bear season; others believe that the newly found scalability will facilitate the adoption of blockchain technology in the traditional world.
The Ethereum merge will complete the migration of Ethereum from a Proof-of-Work (PoW) network to a Proof-of-Stake (PoS) network, which will eliminate the old mining model and replace it with a less energy-consuming staking model. Originally, the merge was scheduled to happen around September 19, 2022. However, tweets from Ethereum developers and Enthusiasts suggest that the merge will happen by September 15/16.
What To Expect Before The Merge on September 15th
- Bellatrix Upgrade: The Bellatrix upgrade is set to go live by September 6th. Bellatrix is the upgrade that will set the final stages of the merge in motion. This upgrade is created to permit the last set of mining activities before it becomes halted.
The Ethereum developers set a fixed number of hashes called the Terminal Total Difficulty (TTD) to 58750000000000000000000, after which mining activity will totally stop. Based on the normal hash rate, mining these blocks will take 14 days (roughly September 19/20). However, the developers have agreed to speed up the hash rate to exhaust the TTD within 10 days to achieve the merge on September 15/16.
- Paris Upgrade: The Paris upgrade is immediately triggered after the TTD of 58750000000000000000000 is attained. At this point, mining activity totally stops, and execution on the PoW chain totally stops, and then the first PoS block is produced. In other words, the Paris upgrade confirms the end of the Bellatrix upgrade and finalizes the migration to ETH 2.0
N.B.: The Bellatrix upgrade is launched on the PoW chain, while the first PoS block marks the completion of the Paris upgrade.
Contrary to what many people think, the merge won’t involve any downtimes on the Ethereum network; the Bellatrix and Paris upgrades will facilitate seamless transitions towards ETH 2.0 without network failure or time out.
What To Expect After The Migration to ETH 2.0
The entire crypto community has high hopes and expectations after the merging event; these include but are not limited to.
1. Environmental Friendliness: Cryptocurrency mining involves the use of heavy equipment to compute complex mathematical questions; this process is energy-consuming and is against the values of environmental friendliness. The switch from PoW to PoS will see a great shift in power demands and consumption, especially since Ethereum is the most used blockchain network. Mining activity is already banned in some countries; hence, it becomes important to move towards a more sustainable model (Proof-of-Stake).
2. Increased scalability: The migration to PoS is expected to facilitate a record-breaking 100,000 TPS, which can outperform major payment systems in the traditional world. Hence, Ethereum transactions are expected to be much faster and cheaper after the merge. The Ethereum network is expected to divide into 64 shards running simultaneously, with a minimum of 4,096 validators on each shard, making transactions to be processed quickly and cheaply.
3. Better Decentralization: Mining activity had started since 2008 when Bitcoin was launched; however, by the time blockchain technology got popular, mining equipment had become too expensive for new individuals to purchase; in fact, the older mining tools were replaced with faster dedicated ASICs, which is too expensive for many individuals to own. Hence, the majority of mining activity is carried out in mining pools. However, this beats the purpose of decentralization, as a very small set of people maintain and validate the network, which could cause susceptibility to a 51% attack.
However, by eliminating mining and replacing it with staking, anybody or any set of persons with a minimum of 32 ETH stake can vote on proposals within the network. This helps to increase network participants and facilitate decentralization.
4. Increased value for Ethereum: Unlike other PoW blockchains like Bitcoin, Ethereum doesn’t have a fixed maximum supply; as long as miners keep mining, there is no limit; hence, the value of Ethereum has stayed long in Bitcoin’s shadows despite being the most used blockchain network. The reverse may be the case with Ethereum staking; locking up ETH tokens in stake will reduce the spendable amount of ETH tokens in circulation, leading to an induced scarcity. With increased demand, ETH could rapidly increase in value in the new PoS consensus mechanism.
5. Increased Adoption: Perhaps the most obvious thing to expect from the Ethereum merge is increased adoption and onboarding of traditional users to crypto, with faster payments, smoother to operate dApps, government backing, and increased ETH value. All these will attract traditional users to the blockchain via Ethereum.
The Ethereum merge holds a lot of promise for all and sundry, and while we have our calendars marked, the most important thing to look out for is the aftermath of the merge, and to indeed ascertain if it will serve as a significant upgrade to the current crypto world.