What to know about Ethereum 2.0
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Proof of work cryptocurrencies has been going through a lot as regulators try to limit them because of high mining power consumption.

In curbing the issue of high power consumption by POW coins, we saw how different countries issued bans on crypto mining.

POW crypto coins include Bitcoin, Ethereum, etc.

If you are a crypto enthusiast, you should have heard about the most anticipated crypto event, the merge.

This event has been making rounds online, especially by Ethereum holders.

Ethereum, being a proof of work cryptocurrency, plans to migrate the proof of stake consensus protocol.

The migration has been the most anticipated crypto event since a few months back.

In this article, we will discuss Ethereum 2.0, the merge.

What is Ethereum 2.0? “The merge”

The merge: Ethereum.org
The merge: Ethereum.org

The merge is a crypto term used to describe the migration of Ethereum from POW to POS.

Note: POW-Proof of work, POS- Proof of stake.

Read more: Meaning of proof of stake and proof of work consensus mechanism.

The image above explains the migration process of Ethereum from POW to POS. This simply shows the coming together of both consensus protocols to be transformed into the POS algorithm, permanently.

Apart from the problem of power consumption, “The merge” still solves scalability, security, and sustainability problems of the Ethereum’s network.

The beacon chain shown in the above image is an important component of the merge and will be discussed below.

The beacon chain, how it works.

The beacon chain is the major component of “the merge” as it exists separately in Ethereum’s architecture.

Currently, no transaction has been executed on the beacon’s mainnet but it has been reaching consensus on its own.

The consensus process is made possible by validators, as their account balances are approved.

Unlike Ethereum’s mainnet, the beacon chain is built on a proof of stake consensus protocol.

The beacon chain, created in Dec 2022 has been seen as a de-facto testnet for Ethereum 2.0 and that will change after “The merge”.

Implications of “The merge”

If the merge is successful, it means that the following will happen:

  • No more Mining: After the merge, there will be no room for Ethereum mining, since it’s no longer a POW currency.
  • Funds are safe: If you own Ethereum, your funds won’t be lost after the merge. This will be discussed in detail later.
  • Previous transactions are safe: The blockchain data will still be safe on the beacon mainnet after migration.

When will the merge happen?

Just to clear your nervousness, the date of the merge is not yet certain. But according to a tweet from a member of the Ethereum Foundation, the merge may likely be around September 19, 2022.

The merge date- Twitter
The merge date- Twitter

From the tweet above, the date may be valid if everything works as planned.

Five stages of the merge

Optimistic co-founder of Ethereum, Vitalik Buterin, revealed that after the merge, Ethereum would be able to process about 100,000 transactions per second, solving formal scalability issues.

The Five Stages of the merge are;

  • The Merge. As discussed previously, the transition of Ethereum from Proof of Work to Proof of Stake as beacon mainnet comes in contact with Ethereum’s mainnet.
  • The Surge. In this phase, sharding is introduced to the protocol. Sharding is a scalability inducer that would divide the network into separate partitions called “shards,” designed to distribute the computational load on the mainnet, for increased transaction speed.
  • The Verge. In this phase, the term “verkle trees” will be introduced into the protocol. Verkle tress is known to increase optimization of data storage for Ethereum nodes when it upgrades the merkle proofs.
  • The Purge. Validators are not left from the equation as this phase will reduce the hard drive space necessary for validators, streamlining network congestion.
  • The Splurge. We can call this phase, the miscellaneous phase and it will help for the smooth running of the whole chain operations.

Will Ethereum gas fees reduce after the merge?

This is one of the misconceptions about the merge, as people feel the merge will reduce the high gas fees of Ethereum network. It is important to note that the merge will change the overall consensus algorithm and will not expand the network capacity, this is why gas fees might not be reduced. Reduction of gas fees is another operation on its own, outside the merge.

Will all staked ETH be withdrawn after the Merge?

For the sustainability of the blockchain, validators exiting Ethereum network are rate limited. There will be a limit to how much ETH is removed per day. Reports showed a limit of roughly 43,200 ETH per day. Currently, about 13M ETH is staked in the Ethereum network.

Conclusion

The merge promises to be a good one and we are looking forward to it. Ethereum has been envisioned to surpass BTC in price and market capitalization in the far future. The utilities of Ethereum are a strong conviction for the vision.

 

By Meekness Nnoka

Blockchain Analyst & Writer with top-notch Technological background. Enjoys reading and writing fascinating crypto contents. 4 years content creating experience.

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