There's a day. The date is September 19th. At that time, the people at the top of the platform say they will move their proof-of-work system to proof-of-stake. They have pushed back deadlines before, but now they have a date and everyone seems to agree that it can happen. It is not do-or-die, it is a coordination point, and the date could change by a few days. All of the people involved in the project agree that Sept. 19 is the D-day. What is this all about anyways? You have probably read about the move to proof of stake before, the news washing over you, like the first drops of rain. The news of what has been dubbed "The Merge" trickled into your feed and then out. It would be happening soon, you might have read that. You go on with your life after a few more months. Proof-of-work is a consensus mechanism that includes a lot of computers trying to solve a puzzle in order to add new info onto the network. It is an extremely expensive process and currently uses an estimated 130 watt per year. Back in May, it took over 200 Terawatts per year to keep up with the demand. It is close to the yearly energy consumption of some small countries. At its peak earlier this year, it was using over 100 tera watt per year. By contrast, proof-of-stake randomly chooses validators that will confirm that each transaction is reliable and compensates each machine with currency. The upgrade would speed up the network to reach between 15 and 100,000 transactions per second, according to the Evangelists of POS. According to an explainer from Decrypt the current system can only do 30 per second. It has been a long and difficult road. If you can't tell from the name, proof-of-stake favors those with a certain amount of stake in the system. Being recognized as a validator requires a large initial investment on the part ofminers to hold a minimum of the native ether token, which could go up over time. It is necessary for so many people to sign off on a date. The operators of the computers that manage the chain need to be notified when to switch over. For a decade, the idea of proof of stake has existed. Itpredates the public identity of ether. In late 2013, Vitalik Buterin published his idea of a network that could power applications other than just money. Even though his own idea was entering the world without it, Buterin was always pushing for proof ofstake. The 2012 paper was written by Scott Nadal andSunny King to prove that there was a way to break away from the energy excesses of the digital currency. This would require systems to use a "staking" method in order to add a block on a chain and reap the rewards. People were worried that this would lead to more monopolization. Even without a mass-adoption of proof-of-stake, we already have people like Sam Bankman- Fried, the CEO of FTX, using his vast fortune to buy up failingcryptocurrencies. Proof-of-stake might make it more explicit. This topic has been talked about for years. Buterin wrote about POS in the past. The founder wanted the system to be used from the beginning, but the process was too complex. The BitFury Group released a paper looking at proof-of-stake. It was called "nave" since they would encourage users on "forked" chains to double-spend or allow attacks on the chain. Over the course of the next few years, POW systems remained, and the price of digital currency rose to great heights.
History of “The Merge”
While ignoring all the environmental drawbacks and calling it the only candidate for a native internet currency, Jack Dorsey called it the largest and most profitablecryptocurrencies out there. Having more people at the top of the pile has allowed the network to be more flexible in its use.
There were competing ideas for a POS transition from Buterin and others. An alternative to POW known as "Gasper" was being worked on by developers of theEthereum. Buterin said it was a commentary by bet. The incentive for competing nodes to come to an agreement was given by this.
Despite the public intentions of the developers, implementing proof-of-stake was a much more difficult task. It took years to build a test net and get the proper people on board, despite the fact that it was promised that it would be six months away. At the end of 2020, the first phase of the move allowed staking on the ether block. It has seen over 13 million coins staked in it, worth about $20 billion. During the implementation of Proof-of-Stake, the system will have to be merged with the main ethereum chain.
Buterin told Fortune that it took six years to implement POS.
Which leads us to the year 2022. It was promised for the first half of the year. A June 8 release date was promised by the team after completing a test merge in May. That came and went, and still no merge.
The stars seem to be aligning for a blue merge. The skeptic in me wants to say that this is just a carrot on a stick, with the devs pulling back the treat every time we get close, just to keep this vague notion going.
There seems to be a push from all the stakeholders towards the transition based on the messages from the developers. The Empire State Building was moved from Manhattan to the moon. There are a lot of people who are involved in the proceedings.
There is a large contingent of ether holders who are more than skeptical that ether could tank the value of ether. Ryan Berckmans said on the Unchained that this is a long battle for the soul of the token. It would take from now until they figure out how to mint souls onto the ledger. There is going to be controversy with the number of smart contracts and billions of dollars invested in coins on the platform.
In the MIT Technology Review earlier this year, it was pointed out that you don't have to look back too far to see how disagreements on ether might go. Some users who were angry at being cut out of the old chain remained on the old chain after the fork. Some trading took place on the old versions and others on the new versions. Users can jump ship using a new fork or go back to the old ones. The purpose of trying to make a cleaner, more reliableBlockchain would be defeated by all that.
Local grid systems and the environment have been impacted by proof-of-work systems. China and Iran have all but pushed them out of the electrical grids. According to the grid officials in Texas, the energy draw of the mining industry will be more than that of all the homes in Houston.
The e-waste problem is only made worse by proof- of-work. According to some studies, the entire mining network burns through 30.7 metric kilo tons of equipment annually. The market for graphics cards has been adversely affected by these mining operations, and the market has only gotten better now that the price of digital currency has fallen. When used in mining rigs, these cards can become obsolete in 1.5 years, leading to increased e-waste.
We are aware of all this. For a long time, the impact of cryptocurrencies on the environment has been a common theme, and we have all been waiting for the promised move from ether.
Will The Merge cureCrypto? It won't make it worse. Despite what you think about the whole thing, the intent is solid. Still, it is the biggest coin. It has a market cap of $440 billion. There will be people who don't like the idea of an even more centralizedBlockchain, and will stay on the more dirty chains.
There will be a period of chaos that will eventually come to an end. We will still be dealing with the same problems after that.
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