The Ethereum merger, or “Merge” took place this morning at 8:42 French time, in what is a historic event for the second most important cryptocurrency on the market, which validates the transition of the ETH network from a PoW system to a PoS system, much less energy intensive.
The first block of proof transactions was completed with an almost 100% participation rate. Therefore it is a real success.
Early Ethereum trading is positive after the event, with ETH/USD trading at $1635 at the time of writing, up 1.4% over 24 hours.
Ethereum validates the transfer from PoW to PoS
This Thursday, September 15 on block 15537393, due to the long-awaited merger, the merger of the Ethereum mainnet and the Beacon Chain took place, which means that the network no longer relies on the proof-of-concept consensus mechanism . influence, and used Bitcoin.
Cryptocurrencies such as Ethereum (before Merger) and bitcoin are often criticized for using cryptomining, which involves deploying large networks of miners around the world and using computers equipped with graphics cards of the -powerful and very energy-consuming to. solve mathematical equations to validate transactions.
But with the Merge Update, Ethereum moved to a system called proofs, where “collectors” are used instead of miners. Validators exploit their existing Ethereum as a way to verify transactions and create new tokens, and receive compensation in return. This is a much less energy-intensive method than mining.
ETH power consumption reduced by more than 99%
Recall that the main advantage of the Ethereum merger is that it will reduce network energy consumption by 99.5% according to the Ethereum Foundation. Merge will also pave the way for future scaling solutions, including scaling.
Vitalik Buterin, the creator of Ethereum, tweeted minutes after the merger, saying that “the immediate importance of the merger is the dramatic effect on energy consumption.”
Note that Merge is therefore timely, knowing that the White House published a report last week warning that crypto mining through proof of work could hinder efforts to mitigate climate change, and ban states which could be there.
Ethereum becomes a productive asset with bets
It is also important to point out that Merge also changes Ethereum’s tokenomics. In fact, Ethereum holders can now “pledge” their ETH to become collectors, and get compensated in return.
So Ethereum is no longer just a speculative instrument, but an investment capable of generating income, with some of the usual characteristics of a traditional financial asset.
As a result, Ethereum is arguably the least risky way to make money with cryptocurrencies. This could result in an influx of investors who are interested in betting, but did not previously dare to do so, because it was only possible with altcoins much less solid than Ethereum.
More updates to expect before the massive adoption of Ethereum is expected
It should also be understood that contrary to what some imagine, the Ethereum merger will not solve the problems of network congestion or high transaction fees, concerns that will find their answers in other scheduled updates in the future.
Merge, which is the result of several years of preparation by the Ethereum Foundation, is the first step in a process of updates that would allow for much greater adoption of Ethereum.
Note that “Surge”, “Verge”, “Purge” and “Splurge”, in order, are the next steps in Ethereum’s technical direction.
“Surge” will tackle roll-up scalability by introducing sharding, “Verge” will introduce Verkle trees, “Purge” will eliminate historical data and technical debt, and “Splurge” will involve some smaller miscellaneous upgrades.
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