Ethereum, the native cryptocurrency of the decentralized, open-source Ethereum blockchain, has finally completed its final test run ahead of the most important crypto market event of 2022 – the Merge.
Vitalik Buterin, a genius programmer who created it as a main competition to Bitcoin, created Ethereum in 2013. Since its creation, Ethereum has been operating through a Proof-of-Work model. This model comprises mathematical tasks that expensive and powerful hardware compete to solve. The PoW mechanism requires plenty of energy and sometimes people compare PoW mining to “mining the environment”.
Ethereum has been trying to address the issues associated with the Proof-of-Work model by working on securing the network for all these years. The so-called solution is switching to Proof-of-Stake consensus mechanism. The new method is not energy-intensive and requires users to verify transactions, not hardware.
What is the Merge?
The Merge actually has been on the lips of crypto enthusiasts for quite long, but the project didn’t have this name until now. The community tried Eth2, ETH 2.0 and many other variations of a “new” Ethereum concept, but the “merge” was the name everyone agreed upon.
The Merge is not a new cryptocurrency expected to be launched – the Merge is merely an upgrade to the existing Ethereum network. Still, an upgrade is something people consider common or ordinary and they would be right. This upgrade is meant to be the most important upgrade in cryptocurrency history, which will prepare the ground for developers all over the world to add their own new features to the Ethereum network.
The Merge purpose itself is to literally merge the existing Ethereum mainnet with the Beacon chain. The Beacon Chain is the coordination mechanism accountable for new blocks creation. At the moment, Ethereum mainnet and the Beacon Chain work simultaneously, but it is the Ethereum mainnet that is responsible for blocks validation and validators’ rewards.
Should the Merge be complete, the Ethereum network will switch to the cutting-edge Beacon Chain Proof-of-Stake protocol.
What is Proof-of-Work
To get a better understanding of why the PoS method is superior to the PoW one, we must get the gist of each of them.
Proof-of-Work mechanism, as it is stated above, has been used by the Ethereum network since its creation and was introduced first by Bitcoin.
Why it is called proof of “work” is because of the way new blocks are created. It takes miners’ expensive and powerful hardware to spend computing energy to create blocks and process transactions. Though many PoW supporters claim the outdated mechanism to be the safest, it is particularly bad for climate due to all this energy waste. This is one of the prior advantages of switching the Ethereum mainnet to PoS.
It is definitely the time to say goodbye to PoW. In the next article, we will cover the main PoS model advantages and learn how the Merge will change the cryptocurrency market forever.
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