The Ethereum Merge
The moment has finally arrived! Awaited by millions of blockchain enthusiasts and cryptocurrency investors all over the world, the Ethereum merge is a huge event in the Web 3.0 ecosystem. Let's take a look at what it is and how it will affect the industry.
The Ethereum Blockchain
The Ethereum blockchain was created in July 2015 by Vitalik Buterin and unlike Bitcoin, is a programmable blockchain. This meant that people could use it not only for cryptocurrency transactions but also to build apps and smart contracts which paved the way for a new era of innovation. While the solidity-based Ethereum blockchain paved the way for a lot of Decentralized Applications, projects, and NFTs, the fact that it used Proof-of-Work as a consensus algorithm meant that its power consumption was humongous and required a lot of investment into high-end hardware for mining purposes. However, this did not deter people from using it to launch cryptocurrencies, create smart contracts, mint NFTs and perform a ton of transactions, making Ethereum the most popular blockchain (by volume of transactions) in 2021.
The Beacon Chain
In December 2020, the beacon chain was launched in order to prepare for Ethereum to shift from proof-of-work to proof-of-stake consensus. It was an experiment to test whether the PoS algorithm would be possible to enable on the Ethereum blockchain.
How did the Merge happen?
The Merge joined the execution layer of the original Ethereum mainnet (that had been operating on PoW since genesis) with the consensus layer of the Beacon Chain (which used PoS for consensus). This resulted in a single Ethereum chain, which uses Proof-of-Stake as its consensus algorithm.
How does the Merge impact Ethereum?
The reason this merge was a critical development was the fact that staking offers multiple advantages over mining, like:
- Reduced power consumption
- Increased security
- Easier to thwart malicious actors
If you regularly perform transactions on the Ethereum blockchain, have a smart contract, or invest in NFTs, you might be wondering how this merge will impact you.
The good news is, that you don't have to change anything you do to adapt to this merge. You can continue to carry out transactions as you always have. The merge did not impact how everyday users interact with on-chain projects and therefore, you DO NOT need to make any changes to your data or your wallet after the merge.
Beware of someone who says otherwise, because they might be trying to trick you into revealing your account/wallet details to take control of your funds and/or other assets.
The future of Ethereum
Thanks to the merge, further scaling of the eth network has been made possible in the form of sharding. Sharding refers to the process of dividing a database horizontally in order to distribute the load. With Ethereum, sharding will reduce the load on the network and further lower the barrier for people to run clients on the Ethereum blockchain. According to ethereum.org, sharding for the Ethereum network is currently scheduled to happen sometime in 2023. The future of the ecosystem indeed looks bright!
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Anshul
Anshul is a cybersecurity analyst at DeTaSECURE. He has helped multiple organizations secure their digital assets as a security professional. He holds certifications like CEH and AZ-900. You can reach out to him by Clicking Here.