Ethereum: The Merge is supposed to abolish mining in August
Swarm of birds at the confluence of the Jamuna with the gang. Image of Lensnmatter via Flickr.com. License: Creative Commons

The Ethereum developers announce the largest and most cut upgrade in the history of cryptocurrency for August: the Merge. With him Ethereum should finally switch from Proof of Work to Proof of Stake. Of course, this raises many questions.

Ethereum’s “Merge” could take place in August. This has recently announced this, including Core developers Preston Van Loon and Tim Beiko as well as Vitalik Buterin.

Ethereum Core Dev @Preston_vanloon Just Said the Eth Merge is ready, they are now only testing, and expens the merge to happiness in August. Packed Room @Permissionless are excited about it. Great Question @trustlessstate. So on panel @drakefjustin pic.twitter.com/vx4benatj5

– Benjamin Cohen (@benjicohen421) May 19, 2022

The “Merge” means an event that the Ethereum scene has been looking forward to for a very long time: the merger of the current Ethereum blockchain with the “Beacon Chain”.

With this step, ETH 2.0 Reality: Ethereum will shake off the miners and from now on to the Proof of Stake Blockchain. No more farms with graphics cards and ASICs, instead validators called servers that compete around the blocks by frozen ether through frozen ether. As it was planned from the start.

The Merge will be the largest and most serious change that a large blockchain has ever dared. It will change the basic architecture from Ethereum from scratch to. What we know today as an Ethereum Blockchain becomes an “application man”. This rotates around the Beacon Chain, which was already live at the end of 2020. It is the switching center from Ethereum 2.0, which should become a structured association several blockchains. In this article you will learn more about the architecture of Ethereum 2.0.

This will be about what is concretical by the merge, what it will depend on whether it will actually take place in August and what comes after the merge.

What would change?

First, Ethereum’s energy requirements will reduce massively. This should be pleased to everyone who is a thorn in the side of the high electricity consumption of Bitcoin and Ethereum, and that is also the most important purpose of the exercise.

Where there are no miners, there are no power guzzlers. According to the Ethereum Foundation, energy consumption will decrease by 90 percent, from around 100 terawatt hours a year, as the digiconomist estimates generously, on a few gigawatt hours.

It is interesting for investors that the emission of new ether will also be significantly reduced. Because validators need less electricity and less hardware than miners, and therefore less capital. There will be no fixed formula on how many new ether per block is generated – it is quite complicated because the reward flows to various actors depending on the circumstances – but the emission is expected by about 90 percent. In conjunction with the burning of fees according to EIP-1559, Ethereum could even become deflationary: the amount of money could decrease instead of gaining weight.

After all, Proof of Stake should be safer. Conceptually, the thresholds for possible attacks were increased significantly, which is why a transaction, if it has been confirmed, should achieve a significantly higher degree of “finality”. Here you can find out more about Proof of Stake and finality.

In vain, on the other hand, hope that probably many put in the merge should be in vain: that the sometimes horrendous fees of Ethereum are falling. Because the merge itself touches the scalability at best minimal. This will be the task of upcoming upgrades, which are activated by other application blockchains, to which the load of Ethereum should be distributed. The specialist name for this is Sharding.

The merge becomes the basis of better scalability. But he doesn’t do it himself.

How likely is the appointment?

The date of the Merge is no coincidence: In August, Ethereum’s “Difficulty Bomb” will tick and tick louder.

The Difficulty Bomb increases the difficulty of mining exponentially. If it is not defused by a hardfork, the network will freeze. This is supposed to force a hardfork and make it cleaner. Here you learn more about the Difficulty Bomb.

Whether the merge will actually take place in August depends on what will happen until then. The developers are currently testing the Merge with several clients and networks. They are currently still performing “Shadow Forks”, which simulate the merger in the test networks.

Tl; dr – #testingerhemerge is the priority for all client (and testing!) teams. That Said, Client Teams and the Ef Can’t Single-Handedly Replace Qa for All Ethereum Projects, so IF You Are Building On Ethereum, Now is the Time to Pay Attention and Make Sure You Are Ready 👀 Pos 🔜.

– Timbeiko.ETH ☀️ (@Timbeiko) May 23, 2022

“Now we have completed all of this more or less,” the developer Tim Beiko describes the current situation, “and we will have three test networks to ensure that everything is going well before we venture into the Mainnet.“First the Ropsten-Testnet is forken, on 8. June. Then Goerli, then Sepolia. And if everything runs smoothly in these three test networks, the real Ethereum blockchain should follow in August.

Vitalik Buterin has already warned that the merge could be late if not everything runs as smoothly as optimists expect, or if the developers find details on which they want to grind and file.

The markets also have doubts. On polymarket you can give bets on it until when the merge takes place. A “no” for the 1. August costs 98, a yes 2 cents. In contrast, the odds are more balanced for September. Because the devil is often in the wing of a butterfly.

What does the merge mean for users and dapps?

The Merge was designed in this way, explains the Ethereum Foundation, “that it has a minimal influence on how Ethereum works for the enduser, smart contracts and dapps.“Nevertheless, there are some small changes that can be pointed out.

For example, the block hash is no longer generated by the hazhing of the miners, which gives it a much weaker randomly variable than before and is replaced by a different value.

The intervals between the blocks also change something. So far it has been about 13 seconds for a new block to be found. After the merge it will be exactly 12 seconds.

And while with proof of work there is always a risk of reorgs, i.e. that a block or a short series of blocks are rejected retrospectively, blocks are after the Merge final if they have a confirmation.

These are all more details that hardly play a role for most dapps and smart contracts. Nevertheless, numerous applications-decentralized stock exchanges, NFTS, block explorers, staking pools-take part in the tests in special test networks to ensure that the transition runs smoothly.

If a course of the course is threatened because the Merge releases 13 million ether?

Most in the Ethereum scene are excited about the merge. It gets rid of Ethereum of the accusation that he is a climate sinner, and he should become more secure by Ethereum.

Some investors could drive the view of the merge but also worry lines onto their foreheads. Because currently the validators have frozen almost 12.5 million ether (more than 20 billion euros). They are freed from the merge. Therefore, threatens to flood a flood of ether on the markets and to ruin the price of Ethereum?

In fact, the danger is quite low. Because the ether will not be available immediately, but only with an update that is planned about half a year later. In addition, the ether locked in validators cannot be pulled out completely immediately. There is a limit of how much more ether per unit of time can be removed, which would currently take more than a year for all ether to be thawed.

In any case, many stacking pool already offer that to replace the ether frozen on the Beacon-Chain with tokens (Aeth, Beth), which is why there is already a market for those ether. If the urgent need to liquidate the standing ether, this would already be satisfied. However, this seems to be rather low, since the frozen ether are interest at 6-10 percent.

What comes after the merge?

The merge is not the completion of Ethereum 2.0, but rather the beginning. Further upgrades will follow that Ethereum should bring into the final form: the surge, the verge, the purge and the splurge.

Happy Birthday Beacon Chain!

Here an updated roadmap diagram for Where Ethereum Protocol Development is at and what’s coming in what order.

(I’m sura this is missing a lot, as all diagrams are, but it covers a lot of the important stuff!) Pic.twitter.Com/PuWp7HWDLX

– Vitalik.ETH (@vitalikbuterin) December 2, 2021

The surge will implement “Sharding”: it will connect the other application blockchains to the Beacon-Chain. He is supposed to help Ethereum scaling very far.

The verge will use “Gleze Trees”. These are a further development of the Merkle trees or hash trees, which allows minor evidence and can reduce or completely dissolve the load of the states. This state is a fundamental restriction for Full Nodes at Ethereum, which is why it would be a pretty big deal.

The Purge will simplify the Ethereum Virtual Machine (EVM), i.e. the operational environment of smart contracts,.

Finally, the splurge is intended to integrate various and important further changes that complete the Roadmap from Ethereum. However, this event is likely to be in a fairly further future.