One of the biggest moments in the crypto field happened today after Ethereum completed the Merge and switched over to a new operating system.
The second biggest cryptocurrency in the world has stated that it will use less energy as a result of the Merge which was completed on Thursday, September 15.
Before the change, the crypto reportedly used as much energy used by a medium-sized country.
Here’s everything you need to know about the Ethereum Merge and how Proof of Stake is different to Bitcoin’s operating model.
What is Ethereum Merge?
Ethereum Merge is the switch to the so-called operating system Proof of Stake.
Up until now, the crypto used the same network as Bitcoin, called Proof of Work, which is maintained by a network of computers across the globe using huge amounts of electricity.
Proof of Work has been used by other popular crypto coins such as Dogecoin and Litecoin.
The Merge will see Ethereum Proof of Work blockchain combine with a carbon copy called the Beacon Chain. The latter has been working on Proof of Stake since 2020.
How proof of stake differs from Bitcoin
Bitcoin relies on crypto mining or the so-called system called Proof of Work.
Proof of Work relies on volunteers across the world to maintain the global network by cryptomining. In return for their work, they receive new coins.
Rather than using crypto mining, Proof of Stake will use validators. Validators could be users with 32 ETH in order to ‘stake’ to the network.
As per Investopedia: “The transition to Proof-of-Stake (PoS) will remove the need for mining nodes to compete for block rewards, and instead requires node operators to stake 32 Ether (ETH) as collateral to become network validators to earn rewards.”
The Ethereum Foundation states that using the Merge will lead to 99.95% reduction in energy consumption.
Experts speak on the merge
CEO of blockchain firm Quant Gilbert Verdian said: “The Merge is a significant step forward bringing Ethereum into the mainstream, and it marks an evolution of blockchain technology.
“A smaller carbon footprint has long been an industry goalpost… Now that this is happening, we will see more institutional adoption where Financial Services turn to decentralised infrastructure. It can offer safe and secure transaction processing at a fraction of the cost, when compared to the enormous expense and burden of today’s infrastructure.”
Ethereum co-founder Vitalik Buterin celebrated the Merge on Twitter and wrote in a post: “And we finalized! Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today.”