In what is unarguably the most significant technological upgrade in the history of Ethereum, the merge will commingle the Ethereum mainnet — the execution layer comprising accounts, balances, smart contracts, and blockchain state — with the proof-of-stake (PoS) layer provided by the Beacon chain. The Merge is expected to be the quintessential harbinger of new features, enhancements and upgrades to the network.
Growing speculations and misconceptions about the impact of Ethereum's upcoming "Merge" has caused quite a racket in the crypto community. With the upgrade expected to happen by mid - September, the market narrative is faced with a kaleidoscope of uncertainties as crypto assets suffer a steady decline in prices.
What is The Merge
Since the inception of the network in 2015, the mainnet has been secured by the proof-of-work (PoW) consensus mechanism. Unlike the mainnet, the beacon chain is secured by a proof-of-stake (PoS) consensus protocol — a system that uses staked ETH to validate block production and essentially, secure the network.
The beacon chain (or "consensus layer") was introduced early December 2020 , existing as a separate Blockchain running alongside the mainnet ( or "execution layer"). While the mainnet processes the transactions on the network, the beacon chain coordinates the network of stakers ( or "PoS validators)
The Merge represents a fusion of the proof-of-work (PoW) protocol running on the mainnet with the proof-of-stake consensus protocol on the beacon chain. A shift from PoW consensus mechanism to PoS consensus signifies the end of mining as the means of block production and validation of transaction on the network.
A chilled breeze after sunset
Is there anything more colorful and musical than a sunset? An orange red hue from the fading sunset bathes the evening sky in a symphony of serenity. It is a beautiful sight to behold, but nevertheless, it signifies the close of day. Since the genesis of the Ethereum network, the PoW consensus mechanism has been the engine of block production for nearly a decade — but now, the sun is setting on the use of miners to secure Ethereum mainnet.
After the merge, smart contract interactions, apps, balances and mainnet transactions will be bound together in the nucleus of the proof-of-stake consensus mechanism provided by the beacon chain.
The Merge will be executed on Ethereum’s main network when the total difficulty reaches 58750000000000000000000 on or before September 15, 2022. In a tweet, Vitalik Buterin made it clear that the timing was only an estimate. There might be delays if the merge experiences any bit of complication along the way.
At the Eth Shanghai conference in March 2022, Ethereum co-creator Vitalik Buterin revealed that the plan to transition from PoW to PoS consensus mechanism is an integral part of the network's roadmap. He said,
"We've been working on proof of stake for about seven years now, but finally all of that work is coming together"
The Ethereum Foundation highlighted six improvements offered by the PoS system relative to the PoW system. One of the most talked about is “better energy efficiency". Ethereum core developer Preston Van Loon further explained to Fortune saying,
"The switch from proof of work to proof of stake [will] reduce overall energy consumption of Ethereum by 99.9% or more"
What do you need to do?
Users and holders need not do anything with their funds or wallet before The Merge. Scam artists will try to take advantage of the situation by promising to help you "upgrade to ETH2". Phishing scams are on the rise and The Merge has presented yet another opportunity to part users and their crypto. You must be wary of their tactics.
The Merge will undoubtedly cause a paradigm shift in the next chapters of Ethereum's existence. Complications with the upgrade could inadvertently ruin the emergence of the network from its chrysalis. However, the crypto community has shown great levels of confidence in the abilities of the developers to deliver a smooth transition.