{"id":4489,"date":"2022-06-30T12:22:17","date_gmt":"2022-06-30T11:22:17","guid":{"rendered":"https:\/\/www.xdefi.io\/?p=4489"},"modified":"2022-08-10T10:13:31","modified_gmt":"2022-08-10T09:13:31","slug":"the-ethereum-merge","status":"publish","type":"post","link":"https:\/\/www.xdefi.io\/es\/the-ethereum-merge\/","title":{"rendered":"The Merge – The Most Significant Ethereum Upgrade Ever?"},"content":{"rendered":"

This year the Ethereum<\/a> blockchain will officially switch from a proof-of-work to a proof-of-stake consensus mechanism. Technically, the PoW mainnet will \u2018merge\u2019 with the existing PoS Beacon Chain – hence the name \u201cThe Merge\u201d. This will be the most significant blockchain upgrade for Ethereum and maybe even for the wider crypto industry.\u00a0<\/span><\/p>\n

This article explains what the Merge is and what consequences it will have for both the Ethereum network and ETH the asset.<\/span><\/p>\n

This article has been written for XDEFI Wallet by\u00a0Korpi<\/a>.\u00a0<\/em><\/p>\n

Proof-of-work vs proof-of-stake<\/span><\/h2>\n

A blockchain is a distributed database with many nodes that need to agree on the global state of the network (things like account balances and the order of transactions). The way in which agreement is reached is known as a <\/span>consensus mechanism<\/span><\/a>. The most popular types of consensus mechanisms are: proof-of-work (PoW) and proof-of-stake (PoS).<\/span><\/p>\n

More information about PoW vs. PoS: <\/span><\/i>Intro to Proof of Stake vs. Proof of Work<\/span><\/i><\/a><\/p>\n

Ethereum, like Bitcoin, currently uses a <\/span>proof-of-work <\/span><\/a>(PoW) consensus mechanism. Miners compete to create blocks of transactions by solving complex mathematical problems which require powerful and energy-hungry GPUs (graphics processing units). To defraud the PoW chain, one would need 51% of the network\u2019s computing power which would require huge investments in equipment and energy.<\/span><\/p>\n

In a <\/span>proof-of-stake <\/span><\/a>(PoS) consensus mechanism, blocks are created by validators who need to stake ETH to participate in the system. If validators behave maliciously, their collateral can be destroyed – this approach replaces the energy-intensive computations of PoW. To defraud the PoS chain, one would need 51% of the total staked ETH which would eventually be slashed – this makes such an attack extremely expensive to carry out.<\/span><\/p>\n

Why move from proof-of-work to proof-of-stake?<\/span><\/h2>\n

Although Ethereum initially launched with a PoW consensus algorithm, the vision has always been to make it a PoS network. According to ethereum.org: \u201c<\/span>Ethereum is moving off of proof-of-work to proof-of-stake because it is more secure, less energy-intensive, and better for implementing new scaling solutions<\/span><\/i>.\u201d<\/span><\/p>\n

Ethereum wants to be an environmentally-friendly network<\/span><\/h3>\n

As explained earlier, PoS doesn\u2019t require intensive computational work of PoW. According to many estimates, the expected energy savings from the switch to PoS will be around 99%. This is not only a huge reduction in energy consumption but also a great narrative for an increasingly environmentally-conscious world and a viable solution to one of the common criticisms facing the crypto industry.<\/span><\/p>\n

Read more here: <\/span><\/i>https:\/\/blog.ethereum.org\/2021\/05\/18\/country-power-no-more\/<\/span><\/i><\/a><\/p>\n

\"\"<\/p>\n

Figure 1: Relative energy consumption per transaction in Bitcoin, Ethereum PoW and Ethereum PoS networks.
\n<\/span>Source: https:\/\/blog.ethereum.org\/2021\/05\/18\/country-power-no-more\/<\/a><\/em><\/p>\n

Ethereum wants more security and decentralization<\/span><\/h3>\n

While advocates of PoW and PoS are far from agreeing on which consensus mechanism offers higher security and more decentralization, Ethereum\u2019s vision has always been about PoS for a number of reasons:<\/span><\/p>\n