Ethereum is at the last turning point. Within the early hours of tomorrow morning, the second largest cryptocurrency by capitalization in the world will complete the most important change ever made on a blockchain, the technology that allows digital assets to exist. The technical name is Merge. Merger. The wait has generated so much interest that Google has decided to dedicate a special countdown to this event, as it does on New Year’s Eve, or before the Olympics.
Merge of Ethrerum: what changes
At the moment there are just over 17 hours left for the Merge. At the arrival of Ethereum to a new model of validation of transactions on its blockchain. Few doubts that this is a revolution. Perhaps the most anticipated ever in the crypto world. And with outcomes still difficult to predict. In fact, it will make it possible to reduce the energy costs of running Ethreum by up to 99.95 percent. Although it also raises several doubts. Because from tomorrow it will no longer be the crypto miners and their very expensive computing machines, but the major holders of cryptocurrencies themselves to check and approve the transactions of digital assets in the Ether network (the name of the cryptocurrency that moves on the Ethereum blockchain). .
What is Ethereum Merge, the most anticipated revolution in the crypto world
by Arcangelo Rociola
A revolution. Perhaps popular, because it reduces the access costs to enter the world of transaction variators and the earnings that this activity entails. But in its plutocratic way, because it will be only the amount of Ether already accumulated that will allow you to enter the circle of controllers of asset transfers within the blockchain. The entrance ticket to the club at the moment is 32 Ether, circa 50 mila euro. And from here to climb.
The Risks of Merge: Changing the Engine of a Running Spaceship
Merge is not without risk. The most effective image was provided by the very foundation of Vitalik Buterin, the 28-year-old Russian creator of Ethereum who strongly wanted this step to try to overcome any skepticism about crypto. On the foundation’s website, the Merge is described in these terms: it’s a bit like replacing the engine of a speeding spaceship. Hot. During the trip. In such a way that the new one begins to pulsate directly in the hull. If there is a heartbeat, Ethereum will draw a radical approach distance compared to other cryptocurrencies. It is a patricide against Bitcoin, the first cryptocurrency in the world by age (it was launched in 2008) and capitalization (400 billion dollars, compared to 197 of Ethereum).
From Pow to Pos. A paradigm shift in the crypto world
The creator of Bitcoin, the mysterious Satoshi Nakamoto, in the document in which he presented his creature in 2008, rotated his perfect mechanism around a blockchain based on a protocol called ‘Proof of work‘(proof of work, henceforth Pow). The network of miners, the crypto miners, would have guaranteed through complex mathematical calculations and powerful machines that Bitcoin was reliable and that there would be no double-spending problem within the network.
The green revolution of cryptocurrencies: here’s how Ethereum will cut energy consumption by 99.9%
by Raffaele Ricciardi
No one could validate two transactions with the same amount of money from a single wallet. Basically: no one could have created fake Bitcoins. This is a bit of the heart of cryptocurrencies. It is the key to their success as a digital asset. They are valuable because their mechanism works. It is apparently unassailable.
Until now, Etherum and all major cryptocurrencies have used this mechanism to move value and assets within blockchains. Over the years, and the increase in cryptocurrencies in circulation and in the number of transactions, a major problem has arisen. The powerful computers behind the Pow have begun to consume an avalanche of energy. Equal to the annual energy consumption of an average populated state. Etherum alone currently consumes 112 terawatt hours per year of energy. Almost the energy consumption of Greece.
Ethereum chooses the stakes
Hence the solution of Buterin and associates. It is called ‘Proof of stake’ or test with a stake, (hereafter Pos). The stake is the possession of Ethereum by those who have so many that they have every interest in making sure that all transactions are correctly passed and avoid the problem of double payment. It is in fact only the absolute certainty that the same amount of Ether is not used twice by the same wallet for a transition to keep the trust in cryptocurrency standing. So far the Pow has made sure that this does not happen. Now it will be necessary to understand if the Pos will succeed in the same way.
For sure the new protocol will allow break down the barrier of entry to the validation process. Transaction validators will no longer need very powerful machines to have transactions approved with mathematical certainty, but will be able to use their Ether directly. And obtain returns for each transaction made. A scenario that, explains Valeria Portale, director of the Blockchain Observatory of the Politecnico di Milano, will “also open the door to institutional investors who can easily profit from their cryptocurrencies and become part of the network on which they can also build decentralized applications”.
Ethereum tries to convince the market and investment funds
If the impact on those who own Ethere or other digital assets on the Ethereum blockchain will be zero, it remains to evaluate the impact of the Merge on the value of the cryptocurrency itself. “These days there is strong euphoria around cryptocurrencies, in particular Ethereum is experiencing strong fluctuations, emphasizing its volatility even more than usual. Going beyond the mere market value of Eths, this step could give new life and confidence to the applications developed by companies on these technologies ”, continues Portale.
“In fact, the high energy consumption of these platforms in the past had discouraged investments by companies in applications related to smart contracts, tokens (including NFTs), timestamping, etc. With this change, we hope that more and more companies will use these technologies for their business ”, he concludes.
Buterin faces two challenges. Demonstrate in the medium term that its new protocol works well, and convince investors that cryptocurrencies have put the energy consumption problem behind them. The interest created by the racing replacement of his spaceship’s engine is all in these two steps. If the Ethereum rush continues, it could open a new chapter in the history of digital assets.