- The Ethereum blockchain is about to do some major changes soon.
- This event, called a merge, changes the way ethers are mined or created.
- The migration is theoretically more environmentally friendly and leads to a more secure cryptographic space.
The blockchain, which supports the world’s second largest cryptocurrency, is about to get a major upgrade.
There are several ideas for this event, called a merger, because it integrates two main aspects of the Ethereum platform: existing chains and relatively new chains.
It will change the backbone of how people trade with Ether, a transformation that can ensure a more environmentally friendly and safer future in this part of the crypto world. But, as some people explain, it’s like changing the engine of an airplane during flight.
The merge ‘replaces these energy-hungry machines’
Ether is created when so-called miners use computers with very fast processors to solve complex computational puzzles, such as Bitcoin. Once the puzzle is resolved, the transaction is securely stored on the Ethereum blockchain.
The first cryptocurrency miner to solve the puzzle receives a reward in the form of ETH tokens. In recent years, this reward has been two Ethers, which is over $ 6,000.
According to blockchain company Consensys, this competition will allow miners to run their computers at 100% for long periods of time, consuming large amounts of energy. This is about the same carbon dioxide emissions as the Finnish country.
Therefore, critics are concerned about the environmental impact of cryptocurrencies.
The merger will transform Ethereum from the current model called Proof of Work to a model called Proof of Stake, ending Ethereum’s crypto mining. Instead, a crypto owner who owns a certain amount of Ether can deposit or stake on it to become what is known as a validator.
“It will replace these energy-intensive machines,” David Lawant, research director of crypto index fund Bitwise Asset Management, told that Ethereum uses much less energy than it does today. Will be-an estimated 99% less.
The more you stake, the more likely you are to be selected as a verifier to organize the transactions of users on the Ethereum blockchain into blocks and earn the rewards paid in Ethereum.
These validators use their own tokens for staking and are encouraged to do a better job. Otherwise, the Ether you stake will start to decrease. For this reason, Proof of Stake proponents believe that the model benefits security.
Verifiers are motivated to make the network more secure. The number of Ether coins issued is decreasing, and the rarity of virtual currencies is increasing.
Once the merge is complete, the Ethereum blockchain will be completely proof of stake. This is a chain called the Beacon Chain.
Experts predict that more institutional investors will be interested in this area as they become more certain and less likely to have a negative impact on the climate. Billionaire investor Mark Cuban himself recently told Fortune that he was “very optimistic” about the merger.
So, when will that happen?
Actually no one is sure, but some devs are predicting that it will be ready this summer. However, migrating to a new model is a complex engineering task, making it difficult to identify a solid schedule.
“If you ask the Ethereum developers when the merging will begin, they’ll say, when it’s ready,'” Lawant said.
Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of EGG Finance. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.