5 September 2022
For the crypto community, an immense change is in the air – and it’s not just a change of seasons. ‘The Merge’ is the catchphrase making all the noise and dividing opinion among the brightest blockchain minds from far and wide.
This spring, the world’s most popular blockchain platform will execute a drastic change that will make it greener, and lay the foundations for developers to continue exploring the interoperability of the crypto landscape.
The Merge is the most significant event in the digital assets industry. For one, Ethereum is the most-used blockchain and powers Ether, the second-largest cryptocurrency, with a $190 billion market cap. Ethereum also hosts several decentralized applications (dApps) and decentralized finance (DeFi) protocols. The Merge is the next step in Ethereum’s development, and will be the most ambitious software upgrade ever, arriving after years of setbacks.
At the Ethereum Community Conference in France in July, Ethereum co-founder Vitalik Buterin said the network’s following upgrades will be “great for decentralization”.
The upgrade characterises a fundamental shift of how the Ethereum blockchain operates, by moving away from an energy-consuming process known as “proof of work.” If all goes to plan, the transition will see Ethereum implement a “proof of stake” consensus mechanism which is considered more energy efficient, but some critics have highlighted that it poses a potential security risk.
However, Ethereum.org have explained that the Merge represents the joining of the existing execution layer of Ethereum (the Mainnet we use today) with its new proof-of-stake consensus layer, the Beacon Chain.
“This will eliminate the need for energy-intensive mining and instead secures the network using staked ETH. A truly exciting step in realising the Ethereum vision – more scalability, security, and sustainability.”
The merge will enhance nearly all metrics of the Ethereum blockchain – helping to deliver faster speeds, higher volumes, and lower costs to users in the long term which is a promising sign as wQoin anticipates being listed on public exchanges later this year.
According to a recent announcement from the Ethereum Foundation, the upgrade of all public testnets is now complete, and the ‘merge’ is set for Ethereum’s mainnet at some point between September 10-20.
So, what does this mean? The pending success of the merge will not only affect the Ethereum blockchain, but millions of NFTs the blockchain validates, and numerous decentralized apps and financial systems that rely upon it to function.
Given Ethereum’s power and influence, the consequence of the merge is expected to have a knock-on-effect on the wider crypto space.