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Ethereum Merge Explained

September 13, 2022

The Merge is the most important upgrade of Ethereum's protocol since its inception back in 2015 and is expected to happen in the upcoming days. After The Merge, Ethereum will move from its current proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism.

Ethereum merge explained

What is actually merging?

The Merge is the process of merging of Ethereum Mainnet layer with the Beacon Chain layer. Ethereum Mainnet layer is the primary public Ethereum blockchain network. Most users know it as the Ethereum blockchain. On the other hand, the Beacon Chain layer coordinates the network of stakers (validators in the proof-of-stake consensus mechanism). Hence, after The Merge, the Beacon Chain layer's proof-of-stake mechanism will replace the proof-of-work consensus mechanism, while all historical transactions, balances, and smart contracts from the legacy Ethereum Mainnet layer from its inception in July 2015 will be kept.

Why is it important, and what are the main changes?

Firstly, switching from proof-of-work to proof-of-stake consensus would decrease the energy consumption used by Ethereum by more than 99%. High energy consumption involved in all cryptocurrency mining (i.e., maintaining proof-of-work consensus) attracts a lot of criticism and is used as a political attack vector and has negative externalities such as air pollution. After The Merge, Ethereum will be much more energy efficient and environmentally friendly.

Secondly, it will lay the foundation for further Ethereum improvements, especially in scalability and stability. Future upgrades will enable Ethereum to process much more transactions by hopefully reducing gas fees and eliminating the need to maintain the entire Ethereum blockchain to validate transactions, increasing the nodes' stability and distribution.

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What are the following upgrades after The Merge?

While The Merge is a significant milestone not only in Ethereum's development but in the whole crypto industry, real changes will be experienced by users only after following upgrades which will be released later and are called surge, verge, purge and splurge.

Surge – most anticipated upgrade as it would introduce sharding, a scaling solution for Ethereum. Sharding will enable smaller chains (shards) to be linked to the main Ethereum blockchain, so not all transactions must be validated on the main chain. Theoretically, it should scale Ethereum from 10-15 transactions per second today to 100,000 transactions per second after the upgrade. Also, during The Surge, ethers staked in the Beacon Chain will be unlocked, and users will be able to decide to keep them staked or liquidate them.

Verge – will improve the distribution of Ethereum's consensus network as it would not be necessary to maintain a full blockchain to validate transactions.

Purge – as the Ethereum blockchain gets bigger and bigger, purge will introduce an update to remove old transaction history from Ethereum's blockchain to reduce its size.

Splurge – is the final planned update and will contain further tuning of Ethereum's blockchain.

What will The Merge mean for SpectroCoin users?

SpectroCoin will fully support the transition to the proof-of-stake consensus mechanism. We have been actively preparing for The Merge over the last months, so we expect the transition to be smooth.

However, there might be a short downtime of transactions processing after the upgrade to validate if The Merge was successful and Ethereum works as supposed.

Your assets will remain safe, as always, and no additional actions are required on your side, i.e. you do not need to convert your existing ether or ERC-20 tokens into anything else before, during or after The Merge.

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