Ethereum’s long awaited merge finally complete, leaving crypto fanatics in splits
Amid numerous speculations and rumors, the Ethereum merge finally completes on September 15, after years of tests and trials. The Ethereum merge was telecasted live, where the upgrade took merely 15 minutes to complete and declared a huge success. Never before has any cryptocurrency attempted to switch its consensus mechanisms. The Proof of Work now will no longer be in use to verify the transactions in the Ethereum blockchain network, as the Proof of Stake will be the new consensus mechanism.
One of the major reasons behind the Ethereum merge was the environmental issue of energy consumption. According to a report by the Washington Post, the amount of energy consumed by Ethereum in just one hour was equivalent to the whole of New Zealand’s energy consumption in one year. However, thanks to the merger, the energy consumption of the Ethereum network will now drop by 99.95% after switching to the Point of Stake consensus mechanism.
Where in the Proof of Work consensus mechanism hundreds of miners used to work on verifying one transaction at a time, ultimately wasting 99% energy, on the other hand, the Proof of Stake consensus mechanism picks one validator at a time for the verification of a transaction. Just as miners, validators can also participate in the network either individually or through pooling. Although anyone can be a validator by staking Ethereum tokens, the one with the most Ethereum tokens staked for a particular transaction has the most chances to be chosen by the system.
Not only has the new consensus mechanism cast out all the miners from the network, ultimately replacing them with validators, but also contributed to the security of the user. On doubts raised over the security, the Point of Stake consensus mechanism is capable of slashing a validator’s entire staked tokens in case of any fraudulent activity. All in all, the user safety has been put on top, for the hacking attempts are going to be quite expensive due to the strict rules laid out by the system.
Now coming to the drawbacks, even a genuine validator with no fraudulent intentions comes under the risk of getting penalized in case of any unprecedented power-cuts or system-errors at the time of verifying a transaction. However, the possibilities of such penalties are diminished since most of the transaction verifications are passed down to the groups of validators. The individual validators may start to use power back ups to avoid any unwanted penalties.
Contrary to speculations made by industry experts, there was no such surge or drop in the trading price of Ethereum, which stayed around $1606 after the merger. The transaction fee too remained the same, which people were assuming could be waived off. Similarly, the transaction speed saw no such drastic change, as it only got faster by one second. Where it took 13 seconds to add a block to the chain pre merge, it will now take 12 seconds.
The developer community welcomed the Point of Stake mechanism with wide open arms as for them Point of Stake directly means more scalability. Ethereum, which is known to be home of several lending companies, NFTs, Dapps, worth $60 billions, is now leading the global race of web 3.0 and blockchain after the long awaited successful merge. However, the merge was merely the first of the five steps that are scheduled to be implemented by 2026, which are expected to bring more significant changes into the chain and serve the users with more security, scalability, and privacy.
