What ‘The Merge’ in Ethereum’s shift to Proof-of-Stake consensus really means
As the price and market cap of Ethereum (ETH) measures consistent increases, moving beyond the $3,000 mark, many are asking, “What is The Merge?” The answer lies with Ethereum’s shift to proof-of-stake consensus.
The term “The Merge” was first coined by Ethereum founder Vitalik Buterin in a series of tweets in October. At the time, Buterin was referring to the shift from proof-of-work to proof-of-stake, saying that the “onward and upward trend in PoS is strong.”
The “The Merge,” as it’s being called, is an attempt to shift from PoW to PoS, with the former being incompatible with the latter. PoS is a consensus mechanism that doesn’t need miners — instead, it relies on the consensus of the entire network. Theoretically, this should mean fewer ETH are required to sustain the network, and that’s good news for price.
What does ‘The Merge’ entail?
The upcoming Ethereum Merge will ‘merge’ the current Ethereum Mainnet with the Proof-of-Work (PoW) and the Proof-of-Stake (PoS) networks. The PoW and PoS networks both play an important role in the Ethereum ecosystem, but the PoW network is currently the only one that provides a mechanism for miners to secure the network and record transactions.
However, with the upcoming Ethereum Merge, the PoW and PoS networks will be combined, causing a shift in the security mechanism for the network and the introduction of new opportunities for miners. This shift will be a key moment in the evolution of Ethereum, and it’s something that’ll be of interest to both new and experienced cryptocurrency investors alike.
As a result, it will become possible to mine Ethereum on a home computer, instead of requiring specialized hardware. This will make Ethereum mining more accessible to the average person and reduce the concentration of mining power in the hands of a few large mining farms.
In a nutshell, the Ethereum Merge is an important step in the transition to Proof-of-Stake (PoS), which is expected to bring significant improvements to the scalability, security and cost-efficiency of Ethereum.
Public interest in Ethereum Merge soars along with the price
Public interest in Ethereum Merge, the proposed hard fork of the Ethereum chain, has surged along with the price of one of its largest proponents, Maker DAO.
The proposed hard fork, if and when it happens, would create a new version of Ethereum that enables greater scalability by allowing for more transactions to be processed on the network.
Today, the value of the entire Ethereum network is roughly $130 billion, so even a small hard fork with a significant portion of the network would have a significant impact on the price.
More importantly, a hard fork would be a critical step on the road to creating a version of Ethereum that is capable of handling the volume of transactions that exist on the existing version of the network.
Ethereum’s shift to proof-of-stake consensus is a big moment for the network. The move from proof-of-work consensus to proof-of-stake is a fundamental change in how the network operates, and it’s one that will have a major impact on the way the platform operates moving forward.
However, while the transition from proof-of-work to proof-of-stake may be significant on its own, it’s also part of a much larger transition that’s been percolating beneath the surface of Ethereum’s network for some time now.