The news of American software giant Adobe buying design startup Figma this week might have come as a surprise to many but not the Merge.
On September 15, millions of crypto enthusiasts around the world counted down to the biggest moment in the history of Ethereum and possible cryptocurrency: the Merge.
After 7 years of the Ethereum blockchain which used the proof of work method to create tokens and record transactions, moved to the proof of stake method.
What this means
Ethereum, the second largest cryptocurrency with a $207 billion market cap will now use much less energy than it does now. This is because the proof of work method is an energy intensive method that uses high amounts of energy to process new transactions on the network.
But proof of stake is different, it requires people called validators—anyone with at least 32 ETH available—to “stake” or deposit into the network. Users can also participate with smaller amounts of ETH through staking pools or cryptocurrency exchanges.
Now Ethereum will use less energy to run, the merge is expected to reduce worldwide electricity consumption by 0.2% according to Ethereum researcher Justin Drake. It will also pay out fewer block rewards to stakers.
Misconceptions: There's been some rumours that this upgrade will make Ethereum faster and cheaper. Not so fast, those are issues that’ll be fixed in other upgrades:
What’s next?
Clearly the folks at Ethereum foundation have a sense of humour in their choice of name for the next phases of upgrade for Ethereum.
The Surge: This phase will bring sharding to Ethereum. Sharding allows for layer 2’s to scale more easily, Essentially, the Ethereum network will process transactions faster as well.
The Verge: This phase implements “verkle trees.” and “stateless clients”. It will be easier to run a validator and “great for decentralisation”.
These technical upgrades will allow users to become network validators without having to store extensive amounts of data on their machines; still making it easier.
The Purge: As the name implies the purge will delete old history of transactions and activities on the network, thereby cutting down the amount of hard drive space validators need and reduce network congestion.
The Splurge: Ethereum today can process about 15-20 transactions a second but at this stage it’ll be able to process 100,000 transactions per second and other things.
