The Ethereum network transitioned from the now-outdated proof-of-work mining architecture to the proof-of-stake consensus mechanism on September 15, 2022. The ‘Merge’ update has been completed, reducing the blockchain’s energy consumption by 99.95% and ushering in a new era of eco-sustainable crypto.
After the Merge, Ethereum will employ a “proof-of-stake” method every 12 to 15 seconds when a new block needs to be added. An algorithmic lottery technique will choose who gets to verify transactions and receive tokens as compensation for doing so from a pool of stakers who will temporarily deposit their tokens to safeguard the network.
Vitalik Buterin theorises that the laws of physics are being reinvented by the Merge in its own virtual worldv. PoW uses functionalities found in everyday objects like hardware, electricity, and computers to function. In contrast, PoS virtualizes everything, “basically letting us create a model of a universe with its own physics.”
He added that this will benefit “non-environmental externalities” as well as the environment, which has been a heated topic among environmentalists regarding the crypto area. The price increase of GPUs as a result of mining Ether (ETH) was used as an example.
He also claimed in a tweet that the Merge will cut global electricity use by 0.2%, precisely quoting Justin Drake, a researcher at the Ethereum Foundation, who made the assertion during the event’s live feed.
The Merge ultimately happened on Thursday at 06:42:42 UTC at block 15537393, just after Vitalik’s brief moment of fame during the webcast. At a Terminal Total Difficulty of 5875 quintillions, the execution layer of the Ethereum mainnet and the consensus layer of the Beacon Chain were combined. The network is no longer dependent on a proof-of-work (PoW) consensus method as a result of the Merge.
With the help of these new optimizations, users and developers may scale the network in ways that weren’t feasible or sustainable in the past. This is a critical action for accelerating the use of decentralised technology and bringing the subsequent billion people into the ecosystem.
Following the Merge, Ethereum currently uses almost 0.01 TWh of energy annually to maintain network security. The platform used around 112 TWh/year before the Merge. The whole post-Merge Ethereum network currently uses less energy than online games, Netflix, or payment services like PayPal. In contrast, Bitcoin’s PoW mining consumes around 200 TW annually.
Unfortunately, since switching from proof-of-work to proof-of-stake for consensus, the Merge does not dramatically alter any factors that directly affect network throughput or capacity, the on-chain cost (or the fee charged by the network) will remain the same.
The ETH miners, however, who were left with dwindling options following the upgrade—giving up mining and staking ETH instead, or transferring to other chains—are now en masse resorting to substitutes like Ravencoin (RVN), whose hash rate soared following the Merge.
The enormous ETH inflow to these exchanges in the days preceding the event, as news publishing house previously reported, was caused by traders selling off their holdings in anticipation of a decline in the price of Ethereum following the Merge— a month ago the sentiment was different, data suggested that after the merge price of the ETH token will rise .
The price of the decentralised finance (DeFi) coin was $1,458.71 at the time of publication, down 0.96% from the previous day and 17.31% from the previous five days.