All You Need To Know About Ethereum’s Merge
What is the merge of Ethereum with the Beacon Chain Proof of Stake system? What do you need to know about it? If you want to know everything about the merge and how it will affect you as an Ether investor, this guide has all the answers. From its very beginning in December 2020 until the definitive merge planned for September of this year, here’s what you need to know about Ethereum’s merge.
What Does the Ethereum Mainnet and Beacon Chain Merge Entail?
The Merge is the name given to the transition process from the existing execution layer of Ethereum (the Mainnet used today) with its new Proof of Stake consensus layer, the Beacon Chain. Ethereum developers launched the Beacon Chain in 2020 as a new Proof of Stake consensus that will eliminate the need for mining, thus drastically reducing energy consumption. In the beginning, the Beacon Chain ran separately from Mainnet. Ethereum Mainnet - with all its accounts, balances, smart contracts, and blockchain state - continues to use Proof of Work, while the Beacon Chain runs with Proof of Stake.
Impact On Energy Consumption
Ethereum's co-founder Vitalik Buterin said in an interview at the StartmeupHK virtual conference that even though Proof of Stake is at its earlier stages, the switch of Ethereum's blockchain will mean an energy consumption reduction of more than 10,000x. The Proof of Stake consensus mechanism attempts to tackle the PoW problem of wasted electricity (https://bitkong.com/en/green-bitcoin) by proportionally assigning mining power to those who own more coins. This way, instead of spending electricity to run millions of computers for hours to compete for the same hash, the workload of a PoS miner can be predefined efficiently. A safeguard against wrongdoing, miners, put up their own crypto as collateral to guarantee they will validate the transactions accurately.
Timeline Of Transition
On December 1st, 2020 Beacon Chain was created, constituting phase 0 of the merge. Phase 1, the partitioning of Ethereum’s blockchain, also known as the initial sharding, began in the first quarter of 2022. This proof of stake network ran in parallel to Ethereum’s Mainnet since then. The Ethereum Mainnet, its accounts, balances, smart contracts, and blockchain state continue to be secured by proof-of-work, even while the Beacon Chain uses proof-of-stake. When the merge finally concludes in September of this year, the two systems will combine into one and Beacon’s PoS will definitely replace the Mainnet’s Proof of Work.