The announcement was made official by Vitalik Buterin on his Twitter account, but cryptocurrency enthusiasts could also see the release of the update. Thursday 15 September 2022 at 8:42 and exactly 42 seconds, second part of the update The Merge, or La Fusion in French – code name Paris – was implemented on the Ethereum Blockchain.
Concretely, if we talk about merger, it is because the project merged the main Ethereum blockchain (called “Mainnet”), whose transaction validation was based on the Proof of workwith the “Beacon chain” which from December 2020 has developed a new validation system, much less energy-intensive, called Proof-of-stake.
The Merge, Ethereum’s great blockchain merger, is now complete
Until then, all Ethereum blockchain security, like most competing blockchains, was based on the Proof-of-work system. According to this system, each transaction causes minors to process cryptographic challenges: in other words, independent or pooled actors who supply the network with graphics cards to perform these operations.
In exchange for this work, miners periodically obtain, after a certain number of operations, the right to offer new blocks on the blockchain, which allows them to earn money. The problem is that this approach wastes a lot of energy. Not to mention the real miners’ raid on the latest graphics cards on the market.
With the Proof-of-stake trust and transaction validation is based on a small number of players holding a certain amount of assets. Of course, everything remains more or less automated. But to have the right to become a Validator, the name of these new miners, it is necessary to transfer at least 32 Eth on a specific contract. Then set up a machine to validate transactions for them.
Also in this case, the validators can thus propose blocks. The system is not intended to eliminate transaction fees (gas fees), but to make the blockchain more eco-responsible. The move to Proof-of-stake should in fact reduce the electricity consumption of the Blockchain by 95.99%.
Until then, Ethereum’s electricity consumption was comparable to the annual electricity consumption of the Netherlands (and its approximately 17 million inhabitants). Beyond that, this eco-responsible shift could work in Ethereum’s favor. The blockchain is already as popular with many players as insurance for the usefulness of its smart contracts.
But overall, the electrical waste of blockchains in general has so far slowed their democratization and acceptance by institutional actors. By becoming greener, Ethereum is breaking down this final barrier. This should also prompt many competing blockchains to take the plunge.
Especially since analysts now expect Ethereum’s capitalization to surpass that of Bitcoin to leave it better in the rearview mirror. Finally, note that another major update awaits the Ethereum blockchain in 2023: sharding. This update must explode the maximum number of transactions which is currently about fifteen per second.
After the sharding update, it will be possible to carry out several tens of thousands of transactions per second on the blockchain, which will be comparable or even exceed the capacity of payment card circuits such as Visa, Mastercard or American Express.
And we have finalized!
Happy unite all. This is a great time for the Ethereum ecosystem. Everyone who helped bring about the merger should feel very proud today.
– vitalik.eth (@VitalikButerin) September 15, 2022
“[The Merge] is finalized. Good fusion everyone. This is a great time for the Ethereum ecosystem. Everyone who helped make the merger possible should feel very proud today. “explains Vitalik Buterin, co-founder of the project.