Ethereum Merge
- September 19, 2022
- Posted by: OptimizeIAS Team
- Category: DPN Topics
Ethereum Merge
Subject : Science & Tech
Context : Ethereum has undergone a technical upgrade and this upgrade is called the ‘Merge’.
Concept :
- Ethereum, the world’s second most valuable crypto currency, has completed a significant software overhaul which promises to ramp up security of the crypto currency while claiming to cut down on its carbon footprint.
- Ethereum has changed its algorithm from the Proof-of-Work (PoW) consensus method of setting transactions to the Proof-of-Stake (PoS)
- Ethereum is introducing a new programming language that will help developers build more robust decentralized applications.
Proof of Work & Proof of Stake
- PoW algorithms are used in most block chains. PoW is a system of distributed consensus that relies on computing power to prove that someone has put in the required amount of work to create a valid block proportional to their influence on the network. These algorithms create a trust less system, trust the system and not one person or one organization.
- PoS is a type of consensus mechanism used to validate crypto currency transactions through randomly selected validators. With this system, owners of the crypto currency can stake their coins, which gives them the right to check new blocks of transactions and add them to the block chain. This is known as concept of staking.
About Ethereum:
- Launched in 2014 second-largest cryptocurrency in the world
- Ethereum is a decentralized, open-source block chain. Ether is the native crypto currency of the platform.
- Ethereum was conceived in 2013 by programmer VitalikButerin.
- Ethereum today has the highest adoption among developers and it is the primary infrastructure layer of Web3.
Advantages:
Sustainability
- Ethereum’s energy consumption will be reduced by ~99.95% following the merge from proof-of-work (PoW) to proof-of-stake (PoS). After the merge, Ethereum will generate dramatically less carbon.
Yield:
After the merge has occurred, Ethereum will generate a yield of approximately 4% to 6% on an annual basis if the holder stakes its Ethereum on the network. By staking Ethereum, the network grows and becomes more secure because the proof-of-stake model rewards honest validators whilst punishing dishonest validators and their delegators.
What’s next for Ethereum?
Post ‘The Merge’, the network will undergo further upgrades which he called the “surge,” “verge,” “purge,” and “splurge”.
Surge: This refers to the addition of Ethereum sharding, which promises to process transactions on the network much faster than now. Sharding basically means dividing transactions across several different chains in a way that will decrease fees and speed up transactions
Verge: The verge will implement what Buterin called “Verkle trees” and “stateless clients,” which will allow users on the network to become validators without having to store extensive amounts of data on their machines.
Purge: As the name suggests, this step will involve purging old network history. The purge: trying to actually cut down the amount of space you have to have on your hard drive, trying to simplify the Ethereum protocol over time and not requiring nodes to store history.