This Friday, the co-founder of Ethereum announced that the convergence of the Ethereum blockchain could happen in August, barring major issues. A highly anticipated event by the crypto community.
It would be a real mess for the ecosystem. One of the major updates to the Ethereum blockchain (which has its own cryptocurrency ether), dubbed “The Merge”, will take place in August. This merger consists of a transition from a verification and mining process called “proof of work” (Pow) to a “proof of stake” (PoS) process for Ethereum. A giant step towards a completely different system.
This Friday, Ethereum co-founder Vitalik Buterin gave more details about the transition date during the Web 3.0 ETH Developer Summit event in Shanghai.
“If all goes well, the merger is expected this summer. If there is no problem, the merger will happen in August. If there is a problem, September is possible and October will become a proof of stake by the end of the Ethereum network,” Vitalik Buterin said.
The latter also confirmed the date of June 8, when the developers of the Ethereum network will conduct a new test so that the update can go smoothly. If Vitalik Buterin mentioned August, it seems that the merger date has been postponed every time. The test, originally scheduled for late June, has been postponed to later in the year, as developers of the Ethereum network, including Tim Beiko, believe other tests are still needed.
On the Ethereum site, the merger is announced for the third / fourth quarter of the year, no other indication.
99.95% less energy
As a reminder, PoW (“proof of work” or proof of work) is a system that aims to secure many blockchains thanks to minors (individuals or groups of people) who use the computing power of computers to verify transactions and create new ones. blocks in a blockchain. This system is mainly used by two flagship cryptocurrencies, ether and bitcoin. This practice was the subject of debate in the European Parliament in March 2022, and MPs requested that it be banned in the context of the Mica debates (the “Regulation on the Markets in Crypto Assets”) due to the large amount of energy consumption required by this method. and hence the impact on the environment.
For its part, PoS (“proof of stake”) is a system that aims to secure many blockchains and is considered an alternative to PoW. A crypto owner is chosen at random and has to prove that he owns a certain amount of cryptocurrencies in order to get the right to verify blocks in the network to guarantee its security. This method is less energy intensive than PoW.
On the one hand, as explained above, the PoS system remains less energy-intensive than PoW. Indeed, in a note posted on the Ethereum site in May, the developers claim that the unified blockchain will consume 99.95% less energy after its transition.
The event the community is eagerly waiting for
“The annual consumption of the Ethereum network is estimated at 74.6 terrawater,” the digital assets development association (Adan) reminds. To date and according to figures from Coinmarketcap, ether circulating on Ethereum is the second largest cryptocurrency in terms of capitalization, with a capitalization of 245 billion at the time of this writing. Also, the Ethereum blockchain has risen sharply in recent years, both with the boom in NFTs primarily purchased on the Ethereum blockchain and the emergence of decentralized financial services.
This merger will also lead to new features for miners on the blockchain:
On the Ethereum site, “Once the merger is complete, the validators will take over to verify the Ethereum mainnet. Mining will no longer be needed, so the miners will likely invest their earnings into the new proof-of-stake system.”
On the other hand, this merger should reduce emissions of circulating ethers, meaning that demand for limited amounts of ether may be higher. Indeed, unlike bitcoin, which circulates in limited quantities (21 million bitcoins in the long run), ether currently circulates indefinitely.