[ETH2.0] Emergence of“The Merge”
Part I to an upcoming series of ETH2.0
“The Merge”, the most significant update plan of Ethereum since its launch in 2015 is the most anticipated issue among the crypto and Blockchain industry. Some experts even stated that it might be the best-telegraphed technical event in the modern history of digital assets.
Being the second-largest digital asset, Ethereum’s “The Merge” is eagerly anticipated since many well-followed traders believe the event will be bullish for its price. However, the event has been delayed many times and the forecasted aftermath of the event is quite controversial. In this article, we will go through what “the merge” is and the ongoing progresses.
- The Merge
“The Merge” is the update plan for Ethereum, meaning the transition from Proof-of-Work to Proof-of-Stake on its Mainnet. According to the Ethereum Foundation, the Merge represents the joining of the existing execution layer of Ethereum with its new Proof-of-Stake consensus layer, the Beacon Chain. The background of the update is the growing concerns regarding PoW mechanism’s relative lack of scalability and sustainability.
The Beacon chain was launched on December 1 2020 and has been working as a separated blockchain to the Mainnet which is secured by PoS mechanism. After the Merge, the Beacon Chain will perform as the consensus engine for Ethereum transactions.
To improve its transaction processing speed, the Beacon chain is composed of 64 different shard chains sharing the status of the network. Beacon Chain adjusts the shard chains to avoid collisions and therefore the Ethereum 2.0 can maintain synchronization.
The PoS mechanism needs the coordination of validators who staked ETH for a required amount of its native token for a given period. If the transition to PoS is successfully executed, then validators’ proof instead of mining will be the means of securing the validity of the blocks. After the Merge, Ethereum Foundation believes that it will not only improve its sustainability but also increase its degree of decentralization by easing the entry barrier compared to PoW, which required powerful hardware and energy consumption.
The detailed plan for the event is not officially announced and its vague plan has even been postponed several times allegedly due to the extreme complexity of the transition from PoW to PoS. However, Vitalik Buterin announced the transition will be happen in August if there are no problems from ETH Shanghai web 3.0 Developer summit. Also, the industry is quite optimistic that the Merge will happen within this year.
2. Successful Merge of two important Test Networks
Ropsten, the oldest test network of Ethereum Mainnet has been successfully merged to PoS mechanism in June 8th 2022. Ropsten network’s merge was evaluated as one of the important steps for the PoS transition. Also, Simon furlong, COO of Geode Finance, stated “Ropsten’s successful merge is a big confidence boost for the wider ETH community and showed the core devs are on track to successful transition later this year.”
After one month from Ropsten’s successful merge, another testnet Sepolia also successfully executed its own switch to PoS mechanism in July 7th 2022. With the two important testnets’ successful merges, only one more testnet’s merge is left to go. The industry believes that the Merge is imminent and the upgrades will work smoothly.
3. The invisibility of “The Merge”
Although the two successful merges have boosted the confidence among developers, several setbacks are expected in the schedule to convert Ethereum to PoS. On June 10th, ETH developers announced that they have decided to postpone the plan after discussing problems regarding the application of the “Difficulty Bomb”, which deliberately slow the mining speed to secure the Mainnet from several possible attack schemes. Tim Beiko, who participated in the developer conference, said, “The merge schedule may be postponed to September or October. However, there is a 1–10% chance that it will not be soon this year. We don’t want to push the development team too hard,” he said.
This article covered the meaning of “The Merge” which will be the most significant event in digital asset industry and its ongoing progresses. The next article will go through what will happen after “the Merge” from the view of investors. And the de-pegging issue of stETH and ETH, which is an aftermath of the series of delays will be explained.
References
2. https://time.com/nextadvisor/investing/cryptocurrency/ethereum-merge-what-to-know/
3. https://decrypt.co/104513/ethereum-merge-moves-closer-sepolia-testnet
4. https://www.coindesk.com/learn/what-is-the-merge-and-why-has-it-taken-so-long/
5. https://decrypt.co/102703/ethereum-core-devs-delay-crucial-difficulty-bomb-for-two-months
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