After operating since July 30, 2015 as a Proof-of Work (PoW), the Ethereum network will switch to a PoS consensus algorithm in 23 days. While the change may not mean much to ethereum users and traders, what’s changing under the hood is a very big deal.
You’ve Heard About The Merge, Why Is It a Big Deal?
It will be a significant month for Ethereum’s participants and the network. The Merge is likely to be the most anticipated and well-known upgrade for the Ethereum network since the DAO hardfork. The Merge, which Ethereum will use to replace the previous consensus mechanism, will take effect on or near September 15th 2022. Since the blockchain was created, Ethereum’s consensus mechanism has been a proof-of-work (PoW) scheme, similar to Bitcoin’s consensus mechanism.
Ethereum, however, uses a PoW consensus scheme SHA256 instead. It is preceded in part by the mechanism Dagger–Hashimoto. Ethash had the main objective of offering ASIC resistance. But after some time, Ethash ASIC miner machines were available on the market along with the use of GPUs. Similar to Bitcoin’s PoW consensus algorithm, Ethash miners must put forth the computational cost of purchasing and operating ASIC or GPU miners, and using electricity.
Ethereum won’t rely on miners for transactions validation when The Merge occurs. Instead, the network’s transactions will be validated by entities called validators. The PoS consensus system allows for the selection of Ethereum validators. They must own 32 Ethereum and have to use three pieces software, which includes a validator client, execution client and consensus client. The Ethereum 2.0 contract now has 13406,821 Ethereum. There are currently more than 416,000 validators.
The Ethereum blockchain’s roadmap has had plans to become a PoS chain for a number of years. The Ethereum Foundation provides six different reasons why PoS is an improvement and one of the most talked about is “better energy efficiency.” The Ethereum Foundation’s summary of ETH’s transition to PoS also says that the consensus mechanism provides “lower barriers to entry” because of “reduced hardware requirements” and “there is no need for elite hardware to stand a chance of creating new blocks.”
Ethereum’s proof-of-work miners, the ones with ASICs and GPUs, will need to mine another crypto asset that leverages the Ethash algorithm and there are a few that exist today. The options for miners include mining ravencoins, ergo, bees, or a PoW Ethereum Fork, which is possible during The Merge transition. A few days ago, on August 20, 2022, Ethereum Classic’s hashrate reached an all-time high. Ethereum (ETH), will adopt a new consensus rule and will no longer require a mining machine to mine ethereum. The PoS topic has been a popular subject, but the development towards reaching this goal is also incredibly successful.
Ethereum has a PoS network called the Beacon that is parallel to its PoW blockchain. Developers have safely docked The Merge with all three major testnets — Ropsten, Sepolia, and Goerli — and approximately nine shadow forks have been executed. The Merge will be executed on Ethereum’s main network on or around September 15, 2022, or when the total difficulty reaches 58750000000000000000000. This is when the PoS consensus mechanism for the Beacon and testnets Ropsten (Sepolia) and Goerli will be applied.
Do you have any thoughts about Ethereum moving its consensus mechanism to PoS instead of PoW? Comment below and let us know how you feel about the subject.
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