Ethereum, the second largest blockchain by market cap, is about to undergo a massive transformation known to the crypto community as “The Merger”.
It’s a long-awaited system-wide upgrade that experts say will reduce the blockchain’s energy consumption by about 99% by switching its transaction verification system from a “proof-of-work” that relies on crypto “miners” using massive amounts of computing power. power to validate transactions.
After the merger, Ethereum will use a “proof of stake” system, which instead uses an algorithmic lottery to determine who can validate transactions (and earn tokens as a reward for doing so) from a pool of “bettors” who temporarily deposit their coins , to help protect the network.
Crypto’s environmental impact has long been a point of contention between regulators and the public—a single Ethereum transaction, for example, consumes about as much energy as an average US household during a full work week. Fortune reported last year. That’s part of the reason Vitalik Buterin, Ethereum’s most visible founder, has been laying the groundwork for the merger since 2014.
The upgrade was supposed to happen in 2016, but it kept getting pushed back by the Ethereum Foundation, the non-profit organization that helps maintain the Ethereum blockchain. It looked like it was finally going to happen earlier this summer and then it got pushed back again.
It looks like the merge will finally happen on September 15th, after testing is completed. But despite the long-standing discourse about it, there are still many misconceptions about what will actually happen during the Merger.