What is Ethereum?
Ethereum is a global system of blockchain, which is decentralized. It is very popularly known for its original and inherent cryptocurrency, Ether or ETH.
The Ethereum blockchain acts as a foundation on which many secure networks run. The native currency, ETH, is used in the blockchain network and is also the mode for payments for working on the blockchain
Security, Scalability, and Decentralization are the tenets upon which this Blockchain was built. It is the blockchain of choice for developing secure software and networks and is rapidly changing the way businesses operate and how we live our lives.
Ethereum Merger: What, Why When?
What is the Ethereum Merge? – The Merge is the Transition of the Ethereum Blockchain from Proof-of-Work to Proof-of-Stake. We will explain these terms later in the Blog. The Merge has been in the works ever since the beginning of the blockchain.
It is called the Merge because by merging two blockchains, Ethereum will switch from proof of work to proof of stake.
The Mainnet refers to the Ethereum blockchain that the user accesses, as opposed to various other blockchains that are only used by developers, called “testnets.”
One such testnet is the Beacon Chain. It is a brand-new blockchain network that was completed by the developers of Ethereum in December 2020.
The beacon chain is what the new Ethereum will look like, after the Merge.
It will take over as the main blockchain on the Ethereum network by transferring the data currently stored on the mainnet. Now let us see why the Merge is happening, and the transition from PoW to PoS.
What is PoW (Proof-of-work)?
To run a blockchain, new blocks need to be added continuously with the help of miners who solve complex mathematical problems and compete with other miners to “mine” or create a new block for the network. They are usually rewarded with some ETH for the energy and resources spent since it consumes a lot of computational resources and electricity.
This helps keep the Blockchain decentralized and safe since it is entirely dependent on Miners’ work to run, hence the term, Proof-of-Work.
What is PoS (Proof-of-stake)?
Ethereum is shifting to the proof-of-stake consensus protocol, which requires ETH owners to stake a certain amount of their Ether.
Ether is kept out of transactions by staking. It acts as a reward and security for the right to mine. The new blocks will be added by randomly choosing people who have staked their ETH, and rewarding them for staking.
This protocol will change how mining operates because no one on the network will have to compete to earn rewards. Instead, users who have staked ether will be selected at random by the protocol to confirm the transactions. Then, these validators receive Ether as payment for their efforts. It is supposed to cut down the costs of validation by up to 99%. It will be a huge move for Ethereum since blockchains are often not viewed as environment-friendly.
Testnets involved in the Merge
Before the new technology is introduced to a blockchain’s main network (mainnet) or undergoes an upgrade, users can test it out on a testnet, also known as a test network. This is crucial for public networks like Ethereum so that developers can guarantee upgrades go smoothly and prevent the loss of billions of dollars.
More testnets are transitioning to proof-of-stake as The Merge draws nearer. They are practicing for the Ethereum Mainnet merge by switching to Proof-of-Stake.
There are three main testnets used in testing pre-merge. They are
Ropsten, a proof-of-work testnet, switched to proof-of-stake through The Merge. It can be used to test applications on a merged network, but it will not be supported in the long run and will be phased out by 2023.
It is the most accurate representation of Ethereum because it is a proof-of-work testnet. Sepolia recently went through the Merge to proof-of-stake. Whether it will be sustained over the long term is not yet certain.
Named after a train station in Berlin, it is a cross-client proof-of-authority testnet that is perfect for application developers. Prior to the Ethereum Mainnet being merged, Goerli is the last testnet to be converted to proof-of-stake. Long-term maintenance of Goerli as a proof-of-stake test net is anticipated.
Here is a table highlighting the recent important events in regards to testnets and the merge.
|8 June 2022||The Ropsten Testnet transitioned to Proof-of-Stake.
|6 July 2022||The Sepolia Testnet transitioned to Proof-of-Stake.
|11 August 2022||The Goerli Testnet transitioned to Proof-of-Stake.|
|22 August 2022||The Sepolia Testnet undergoes a post-merge upgrade to disconnect from non-PoS peers|
When is the Merge happening?
According to a blog post from the Ethereum Foundation on Thursday, the “Bellatrix” upgrade prior to the Ethereum merger will go into effect on September 6, and the Ethereum main net merge will take place between September 14 and 20.
According to wenmerge September is predicted to be the month of The Merge.
The most recent tentative date is projected to be Sept. 14.
The big day was originally scheduled for September 19, which means that the date is sooner than anticipated.
The price of Ether has increased significantly as the Merge gets closer. The price of the ETH along with some other cryptocurrencies are currently around, up almost 60% from July when Ethereum Foundation developers had not yet set a deadline.
Even though it is still a long way from its $4,800 all-time high, this is good news for Ethereum supporters.
The upgrade will increase the Ethereum network’s capacity to support its expansion, assisting in addressing persistent network congestion issues that have increased gas prices.
Ethereum is also being used in virtual reality and gaming, along with uses in Banking, Finance, Healthcare, and Supply Chains, among others. The Blockchain industry is now growing faster than ever.
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