The Merge

If you are in crypto and are giving it even 15 minutes of your day, you must have heard of Ethereum Merge and if you are wondering what it exactly is then this is the perfect place for that.

So in a layman’s language, the Merge is an upgrade to Ethereum’s software. As tweeted by Vitalik, it will take place around Sept.13–15, after more than eight years of research.

The Merge will lead to the end of proof-of-work Ethereum and shift to a more energy efficient infrastructure proof-of-stake as Ethereum 2.0

After the Merge, Ethereum estimates that its energy use should fall by around 99.95%.

Proof-of-stake (PoS)

PoS is a type of algorithm that requires blockchain networks to employ validators who stake their own crypto assets in exchange for the chance to validate new transactions on the blockchain. Validators are then selected randomly to “mine” the block. This system randomizes who gets to “mine” rather than using a competition-based mechanism like proof-of-work.

What does The Merge actually means?

Since November 2020, the Beacon Chain (which uses proof-of-stake) has been running in parallel with the Ethereum blockchain. The Beacon Chain introduced proof-of-stake to Ethereum. Because the Beacon Chain existed separately from the main Ethereum network over the past two years, “The Merge” refers to the plan to integrate the proof-of-stake system that’s “controlled and coordinated by the Beacon Chain” with the main Ethereum network.

What happens to your old $ETH tokens?

Your existing ETH tokens will be transferable to the Ethereum 2.0. The legacy proof-of-work Ethereum chain will continue alongside the new Ethereum 2 chain initially.

The token remains the same. It’s just the underlying protocol of the network that will go through a series of upgrades all of which have been nicknamed Ethereum 2.0.