There’s hope that quicker transactions and a reduction in fees could lead to more investors on the Ethereum network. Some are saying the merge only laid the infrastructural foundation for future solutions to these issues. Left unfixed by the merge were Ethereum’s high fees and congestion. However, many users may have had high expectations that simply haven’t been met yet. How did the Ethereum merge go?įrom all accounts, it appears that the actual merge on September 15 went just fine, despite concerns from various experts. Another concern with the PoS protocol is that the voting control could be in the hands of a few key players who are able to put up more Ether to stake in the first place. Ethereum, on the other hand, has been talking about this move for many years now. Many Bitcoin supporters still feel that proof-of-work is more secure and that the blockchain shouldn’t switch over. This means that you need more than a decent graphics processing unit (GPU) to be a validator on the network now. Legitimate and accurate validations are rewarded with new ether blocks. The PoS protocol selects the users known as “validators” to verify transactions on the blockchain. So to become a validator on the network, one must put up a decent investment (32 ETH). Proof-of-stake requires validators to have an actual stake in the blockchain. On the flip side, if a validator adds an inaccurate block, they lose some of their staked crypto. The node then adds the accurate block to the blockchain in exchange for crypto rewards. The PoS protocol chooses a validator node to check a block of transactions for accuracy. The validator stakes their crypto on the network for a set period in order to be allowed to verify transactions. The proof-of-stake mechanism allows users of crypto to stake their crypto on the blockchain so that they can create their own validator nodes. The consequence of this process is that mining devices worldwide compute the same problem, which uses a substantial amount of energy since mining requires lots of electricity. Whichever miner solves the problem first is allowed to add a block of transactions that earns them rewards.
Under the PoW mechanism, miners compete to solve complex mathematical problems. PoW is the original consensus mechanism for verifying transactions that bitcoin used. Both are essentially different algorithms that allow users to add transactions and record them on a blockchain, an immutable public ledger.īefore the Merge, you had to go through the energy-intensive process known as proof-of-work (PoW) to create Ethereum tokens. This is why many cryptos either use proof-of-stake or proof-of-work to validate crypto transactions. Cryptocurrencies are decentralized, meaning they don’t have the control of a financial institution to verify transactions. The proof-of-stake concept is fairly technical, and we did our best to break it down in a previous post here. However, lower fees haven’t come into effect on the Ethereum network yet. The merger should make it easier to introduce upgrades to the network in the future. This merger is positive news for those who are socially conscientious investors because of the significant decrease in energy consumption.
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