Ethereum sure has come a long way since the inception of the blockchain back in 2015. The coin is next only to Bitcoin in market capitalization, and the ecosystem expands by the minute with protocols, dApps, and many other use cases. The cryptocurrency has seen its fair share of difficulties over the years, from large energy consumption to some security concerns and the well-established ETH gas fees that have its users in a chokehold.
“The merge is coming,” is a phrase that is echoed all over the internet. It signals a new set of upgrades to the Ethereum ecosystem that is characterized by the term “ETH 2.0,” and symbolizes the most recent milestone in the continued efforts in improving and developing the network.
What is ETH 2.0?
Ethereum 2.0, also known as ETH2, is a set of network upgrades that are being implemented in order to make it more scalable, secure, and sustainable, as well as to eventually shift Ethereum's consensus mechanism from the current proof of work model to a proof of stake model. The reason for this shift is that the Ethereum network currently uses the same mechanism as Bitcoin, which requires miners to solve cryptographic puzzles before they can add transaction blocks to a chain to be validated. This process requires a large amount of computational power, is very expensive, and cannot effectively cater to the volumes of transactions performed on the blockchain every day.
The proof of stake mechanism that Ethereum intends to use does not require the use of miners or expensive and time-consuming computing resources, but rather the use of nodes known as "validators." Validators use this mechanism to complete transactions and secure the network by staking a portion of their Ethereum for a set period. The minimum amount of ETH required to become a validator under this new arrangement is 32 ETH, and staking more ETH increases a validator's chances of being chosen to validate a transaction. In addition, instead of block rewards, validators would be rewarded with a portion of transaction fees. Furthermore, Ethereum is expected to be 99% more energy efficient under the proof of stake consensus, according to the Ethereum foundation.
Because staking is the underlying principle in PoS, the upgrade began with the introduction of the Beacon chain on December 1, 2020. The Beacon chain is a coordination mechanism that serves as a Consensus Layer (CL) for the Ethereum network and allows users to stake the blockchain's native token, Ethereum. The Beacon chain was initially designed to operate independently of the original Ethereum mainnet or main blockchain, which serves as the Execution Layer (EL). The "merge" of the Consensus Layer and the Execution Layer will allow for a fully functional Proof of Stake consensus mechanism on the Ethereum blockchain by connecting the benefits of the Beacon chain with the mainnet.
Has ETH 2.0 been launched?
Well, yes and no… The process already started earlier this year with the integration of several testnets with the Beacon chain. The process will be said to be complete and fully integrated into the Proof of stake model when the Beacon chain merges with the mainnet. This merge with the mainnet is expected to occur anytime between September 10 and September 20.
This announcement was made via the network's blog which was posted on Twitter by the head of communications for Ethereum, Joseph Schweitzer.
He wrote, “This is it: The Merge is coming. UPGRADE 👏YOUR 👏 CLIENTS!” and linked the blog to the tweet.
According to the blog announcement, there will be a Bellatrix upgrade on the Beacon chain on September 6, and the merge will be triggered after a specific Terminal Total Difficulty (TTD) value is reached between September 10 and September 20.
What next after the merge?
The upgrade doesn't stop after the merge though, Vitalik Buterin said at the Ethereum Community Conference in France that Ethereum will still undergo many other updates which he gave insight to, calling the upcoming updates “surge,” “verge,” “purge,” and “splurge,” and called them keyboards of Ethereum scaling, cleanup, and evolution. To buttress Buterin's point, sharding will be added to the network following the merge. This concept will divide the network into independent "shards" with their own set of smart contracts and ledgers, spreading the load and processing power, allowing multiple transactions to be added to the blockchain at the same time, and increasing the speed at which Ethereum transactions are processed.
Buterin has also noted that the merge will be followed by an explosion of the scalability of the blockchain, increasing the current transactions per second (TPS) of 30 transactions with a block time of 13 seconds up to 100,000 TPS with a block time of 12 seconds. This is made possible by the sharding mechanism, and the combination of sharding and Pos mechanisms has the potential to solve the network's scalability problem and reduce gas fees, which can be very high and is a source of concern for users and developers who intend to build centralized applications, protocols, and other projects on the Ethereum blockchain.
Read Also: Proof Of Stake (POS) vs Proof Of Work (POW
Some believe that this move is what Ethereum needs to dethrone Bitcoin as the crypto market's dominant force., others have predicted that despite ETH 2.0's many advantages, it will have a negative impact on the industry in places like Polygon, which derives most of its value from being a scaling solution to Ethereum; in the staking process, which may be foreign to some users and cause them to lose money; or in the fact that they will be unable to withdraw funds in the event of a market downturn. Either way, The Merge is Coming! and we are about to witness a colossal shift in the cryptoverse.
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