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What is Ethereum Merger?

Ethereum, a decentralised blockchain, has been gearing towards a merger for quite a while. Initially called Eth2, the name is now phasing out due to confusion over its meaning for new users. ‘The Merge’, as the Ethereum community now calls it, will be replacing the proof-of-work (PoW) mechanism with the more efficient, proof-of-stake (PoS) mechanism.

This article will explain in detail everything there is to know about the Ethereum merger and cover the following points:

Also read: Polygon vs Ethereum


Before the Merge

Vitalik Buterin founded Ethereum in 2013, and currently, it works on a proof-of-work (PoW) concept. This involves solving certain computational algorithms and creating new blocks called mining. A PoW mechanism takes a lot of energy but makes up for it in security. The higher the energy utilised, the higher the gas or transaction fee.

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Even bitcoin uses the PoW method, and as Ethereum is trying to take over as the numero uno in the crypto-world, they are adapting. A new and energy-efficient model called proof-of-stake (PoS) has been in the works since 2016. It was supposed to come out in June 2022; however, a further delay of a few months was announced on Twitter, causing a drop in its prices.


PoS vs PoW

Shifting from a power-hungry proof-of-work ecosystem to a power-efficient proof-of-stake mechanism has been laborious. The merge does shift its basic framework to cease higher transaction fees and lower environmental impact.

The following table summarises the pros and cons of each mechanism. Keep in mind that instead of mining, proof-of-stake uses algorithmically chosen validators. They stake their ETH to create new blocks instead of mining by computational power.

Consensus mechanismProsCons
Proof-of-work (PoW)Helps keep cryptocurrencies secure and decentralised.

Easy execution.
Utilises large amounts of energy and investments in hardware for mining.

Individual miners may benefit less than mining pools as computations increase.

High competition as the fastest solver of the puzzle receives some ETH.
Proof-of-stake (PoS)Low energy usage and requires less hardware

ETH is staked, and staking pools can be joined as well.

Zero competition as the validator/block creator is chosen according to the number of stakes
One needs to initially invest in stakes. A large stakeholder can create a new block.

It has taken a long time to reach the merge and has not been proven yet compared to PoW.

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What is the Merge?

The merge refers to combining the Ethereum mainnet with the Beacon chain. The mainnet, or the main network, is the current public blockchain used by Ethereum with a PoW consensus layer.

The beacon chain was launched in December 2020, and it has a PoS consensus layer. The beacon chain and mainnet run parallel to each other, and their convergence is called The Merge.

This merger does not affect any investors or hamper any future investments. It is like an update in the Ethereum framework, which will be economically profitable and comparatively effortless. The Ethereum community claims zero data losses in transactions during this merge and hopes the transition will be seamless. Currently, under tests, this merge will erase proof-of-work out of the mainnet.

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