New Delhi: Ethereum, the network behind the second-largest cryptocurrency by market cap (after Bitcoin), will move from a proof-of-work consensus mechanism to a proof-of-stake blockchain next month in a process called “the merge”. That will make Ethereum at least “99 per cent more energy efficient”.
The Ethereum Foundation has said that the Merge Blockchain upgrade is scheduled on September 6 and the upgrade will be fully completed between September 10 and 20.
“Following years of hard work, Ethereum’s proof-of-stake upgrade is finally here. The successful upgrade of all public testnets is now complete, and The Merge has been scheduled for the Ethereum mainnet,” the foundation said in a statement late on Wednesday.
As a crypto user, Whether you are using Ethereum applications on-chain, holding Ether on an exchange or in a self-custodied wallet, you do not have to do anything.
“If an application, exchange or wallet you use offers additional instructions or recommendations, you should verify these are actually coming from them. Be on the lookout for scams,” the foundation warned.
The Merge is the most complicated upgrade to Ethereum to date.
According to Decrypt, Ethereum currently uses the same consensus mechanism as Bitcoin a”known as proof of work that requires huge amounts of energy.
Proof of stake is different as it gets rid of miners and uses validators, people who “stake” or lock-up Ethereum to keep the network secure and running, which is less energy consuming.
The Merge is a two-step process. The first step is a network upgrade, Bellatrix, on the consensus layer triggered by an epoch height.
“This is followed by the execution layer’s transition from proof-of-work to proof-of-stake, Paris, triggered by a specific Total Difficulty threshold called the Terminal Total Difficulty (TTD),” the foundation explained.
According to Sathvik Vishwanath, Co-Founder & CEO, Unocoin, the merger of one of the original blockchain systems might be saddening for investors globally as Ethereum is considered a brand in itself.
“However, this can also be a positive approach as it reduces the energy consumption and increases the life of Blockchain with protesting environmentalists. This is a progressive step towards making crypto and decentralisation globally acceptable, and creating and managing makes it easier for backward countries with limited power supply,” he said.
Withdrawals from the Beacon Chain will likely be introduced in the first upgrade after The Merge, said the foundation.