Ethereum took one of the biggest steps towards activating proof-of-stake (PoS) this Wednesday by successfully deploying the Merge on the Ropsten testnet. The Merge is one of the critical components of the consensus layer upgrade, previously known as “Ethereum 2.0.”
During the Merge, Ethereum’s proof-of-work (PoW) chain combines with the PoS beacon chain. Now that this has successfully happened in Ropsten, Ethereum is well on its way toward deploying the Merge in the mainnet.
Long-Awaited and Much-Anticipated
Currently, Ethereum runs on the proof-of-work (PoW) consensus mechanism, like Bitcoin. The idea is to continually spend your resources and energy solving cryptographically-hard puzzles. If you successfully do so, you can add your block to the blockchain and earn the block reward and transaction fees. Unfortunately, while PoW is very secure, it can be very environmentally harmful.
PoS, on the other hand, makes the mining process completely virtual. You must lock up a certain amount of ETH (In Ethereum’s case, that’s 32 ETH) and bet on the blocks you know will be added next. The successful validator gets a portion of the block reward when that block joins the blockchain. The transition from PoW to PoS will reduce Ethereum’s energy consumption by 99.95%.
This transition has been much awaited, and Ethereum has often had to suffer social media scorn due to the slow pace of the upgrade. Ethereum core devs have maintained that the slow pace was due to the sheer complexity that the Merge demands and the multiple changes required in Ethereum’s source code. Recently during a conference, Vitalik Buterin said that while August is the target month for the mainnet Merge, there could be a “risk of a delay.”
What Happens Next?
Prior to Ropsten, the core devs successfully deployed the Merge on Ethereum’s shadow fork. The shadow fork is a private mainnet staging area where developers can test various features. Now that the Merge has been trialed in Ropsten, if all goes well, it will be next deployed in the Goerli and Seoplia testnets before finally deploying in the mainnet.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.