THE MERGE — Ethereum 2.0
With August coming to an end and September right at our doorsteps, here’s a summary on the fast-approaching Ethereum Merge.
The Ethereum Mainnet is set to merge with the Beacon Chain Network. The Beacon Chain is a blockchain that is secured by a Proof-of-Stake (PoS) consensus algorithm. It currently isn’t processing any transactions but is serving as a consensus layer. The Beacon Chain is running parrallel to the Ethereum Mainnet right now, similar to how a testnet runs parrallel to a mainnet.
The Merge is the moment in which the PoW system and the PoS system come together, marking the moment that Ethereum permanently becomes a PoS consensus algorithm blockchain.
A) This network change will not affect the transaction history; all the history since the genesis block will not be lost.
B) All the funds will be safe during the transition. In fact, you DO NOT have to do anything with your funds in exchanges or in your wallets.
Don’t fall victim to scams trying to get you to perform certain actions to “protect your funds”.
C) Gas fees will not be affected, because the PoW to PoS transition will not affect actual transaction scaling. Scaling solutions are planned for future network upgrades.
On September 6th the “Bellatrix” consensus layer upgrade will take place. This upgrade will prepare the consensus layer for the merge. Next, the “Paris” execution layer upgrade will take place when the “Total Terminal Difficulty” (TTD) reaches 58,750,000,000,000,000,000,000. This is expected to happen between September 10th and 20th. The TTD is the difficulty level for the final Ethereum block to be mined in PoW. This “Paris” upgrade is the actual switch between PoW to PoS.
Take into account that many exchanges will be halting deposits and withdrawals of ETH and ERC-20 tokens before the Bellatrix and Paris upgrades. Binance, for example, is also preparing for the scenario in which a) everything goes well and the token stays the same, and if b) a hard fork were to occur and a new ETH token is generated. In the latter scenario, Binance will credit all user accounts with 1:1 tokens based on a snapshot prior to the upgrades.
Ethereum’s transition to a Proof-of-Stake Consensus Algorithm network marks a big development in the space as it makes ETH and all ERC20 tokens much more environmentally friendly; The Merge reduces Ethereum’s energy consumption by approximately 99.95%. Moreover, as I mentioned before, this transition to PoS also prepares Ethereum’s technical infrastructure for future scaling solutions.
Writer: Danyela Vásquez
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