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Ethereum is the second largest cryptocurrency in the world by market capitalization. There have been talks of an Ethereum 2.0 coming, and the Ethereum merge we have been talking about for so long is finally completed, but what exactly is the merge all about and what does it mean for the future of Ethereum?
What is Ethereum?
As mentioned earlier, Ethereum is the second largest cryptocurrency in the world by market capitalization, right after Bitcoin. Created in 2013 by Vitalik Buterin, it was not launched until the 30th of July, 2015.
Ethereum started at the price of $2.77 when it was traded for the first time in August 2015. Since then, this cryptocurrency has grown so much and has since become the most popular altcoin.
Read Also: 5 INTERESTING ETHEREUM FACTS YOU SHOULD KNOW
What is The Ethereum Merge All About?
In simple terms, the merge entails the move of Ethereum from proof-of-work to proof-of-stake by merging the Mainnet and the Beacon Chain.
With the merge, you now have a network that can process thousands of transactions per second while remaining trustless and censorship-proof.
In a previous statement, Vitalik Buterin, the co-founder of Ethereum, outlined a five-step, gradual process that would bring Ethereum to its “endgame.”
Previously, Ethereum used the proof-of-work blockchain, the same as Bitcoin. POW uses much electricity, even more electricity than in some countries.
Proof of stake uses significantly less electricity, and validators will be used instead of miners. Validators are people with at least 32 ETH available to stake, or pledge, to the network. Others can also take part with smaller amounts of ETH through crypto exchange platforms or crypto staking pools.
According to the Ethereum Foundation, on a proof of work network, blocks are produced roughly 10% more frequently than on a proof of work network.
How Will The Merge Affect Ethereum?
- The merge will reduce electricity consumption globally by 0.2%.
- Ethereum’s energy usage will be reduced by 99% due to a drastic reduction in power consumption.
- Less ETH will be issued through rewards to validators for their work maintaining the network. This will turn ETH into a deflationary asset.
- Users will enjoy faster processing speed.
- Ethereum’s blockchain will be more secure, making it almost impossible to hack.
The long-awaited merge is finally here, taking the most popular altcoin, Ethereum, to a new level. Although the merge is completed, we cannot expect the changes to happen all in one day.
For example, although it has been said that the merge will bring about faster transaction speed, this will not happen till later, and unfortunately, the merge will not reduce Ethereum’s gas fees.
What else is in store for Ethereum? We look forward to experiencing the new and improved Ethereum 2.0.