Ethereum is Proof-of-Stake. What’s next?

In the previous article, we’ve taken a look at Ethereum’s shift to proof-of-stake, what it means to Sedition, its benefits and what its alleged drawbacks are. With all the anticipation of the shift, one may be excused for thinking that the Ethereum progress is now complete and the blockchain is now in its final state. However, the Merge, or the shift to proof-of-stake, is just one part of the upgrade roadmap for Ethereum. Most articles and videos give a very technical overview, so here we want to give you a very light touch non-technical overview of what’s next for Ethereum and why it matters.

First of all, it is worth mentioning that Ethereum’s three main focal points have always historically been on scalability, security and sustainability.

Scalability refers to increasing Ethereum’s transaction processing capacity, which is currently limited to only about 30 transactions a second, with the goal being to raise it to as many as 100,000. In addition, scalability refers to a gas fee decrease, as currently gas fees remain extraordinarily high.

Security refers to the blockchain being secure from attacks on it and manipulations of the records written. One of the ideas behind moving away from proof-of-work is to prevent the possibility of the so-called “51% attack”, which could occur if 51% of the mining power is accumulated by a single entity — making it theoretically possible to manipulate the records. With proof-of-stake, 51% of the staked capital would need to be in one person’s hands and all participants are much more incentivized to behave honestly, making the blockchain slightly more secure.

Finally, sustainability refers to the fact that for blockchain to be able to truly scale and be accepted by the masses, its carbon output cannot be as significant as it was prior to this shift.

In order to succeed in these 3 areas, Ethereum has put forth a 5-stage plan to upgrade the Ethereum blockchain. The stages are as follows: the Merge, the Surge, the Verge, the Purge and the Splurge.

The Merge refers to the transition from Proof-of-Work to Proof-of-Stake. While the transition is complete, the only remaining aspect for “the Merge” is to allow validators to “unstake” the ether they have staked. This is planned for the near future. The major misconception is that “the Merge” is supposed to significantly decrease the gas fees and increase the network capacity. While the Merge doesn’t achieve this, the Surge should.

The Surge refers to splitting the Ethereum blockchain from one layer to multiple layers, known as shards, in order to improve its processing capacity, hence lowering the fees. It will be done gradually and with numerous checks and balances involved in order to ensure that sharding will not shatter the network. The Surge is planned for some time in 2023.

The Verge update is where things start to get very technical. Essentially, the data storage mechanism of the network is expected to change. It is supposed to allow for faster verification of blocks by the validators, allowing more and more everyday users to become validators, making the system ever more secure and decentralized.

The Purge upgrade will allow the nodes to not have to store the whole version of the blockchain. The network contains hundreds of gigabytes of historical data and validators and clients need to download it all. Expiry will also be introduced to smart contracts. All of these are required to ensure that the amount of historical data that clients need to deal with does not become overwhelming. It is, however, worth noting that this data will not be deleted and it will still be possible to access it via e.g etherscan website.

Final stage is the Splurge, which essentially delivers “all of the other fun stuff”, i.e. miscellaneous important updates.

Overall, it is great to see that the Ethereum foundation is progressing with the update of the network and that the roadmap is actively evolving. Ethereum’s progress thus far makes us confident that over time Ethereum will become the go-to blockchain not only for NFTs, but for underpinning almost all forms of record-keeping.