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The most anticipated Ethereum merge happened on 15th September 2022.
It was earlier buzzed to be called Ethereum 2.0.
But for the users, there’s absolutely no difference between Eth & Eth2.0.
However, to avoid a mental illusion and avoid scams related to the same, the community decided to name it the Eth Merge.
While many crypto users are aware of the merge, what exactly does the merge bring for ordinary people?
Let us delve to know more.
What is Ethereum Merge?
Cryptocurrencies, on the back end, work on a methodology that aims to reduce fraudulent activities on the network. This is called the consensus mechanism.
There are several consensus mechanisms out of which the Ethereum merge story covers the Proof of Work mechanism (POW) & the Proof of Stake mechanism (POS).
The proof of work mechanism is renowned as it is the same mechanism on which bitcoin operates. Even Ethereum worked on the proof of work consensus mechanism until it shifted to the Proof of Stake consensus mechanism.
The Merge basically was the joining of the original execution layer of Ethereum(POW) with its new proof-of-stake consensus layer (the Beacon Chain).
To understand this with an example, we can compare this to 2 trains running parallelly on different tracks. Passengers and their luggage have to be transferred from one train to the other without slowing down both the trains.
Scary, right? But now, it’s done & dusted.
This means that all the recorded ledger, smart contracts and billions of staked dollars have been successfully deployed on the new Beacon Chain.
Voila!
Why was there a need for the merger?
Ethereum is an old player in the crypto industry that brought the wonders of smart contracts to the decentralized world.
With an increase in dapps, the number of Transactions per Second (TPS) grew. The miners had to spend more energy validating the transactions because of the POW consensus.
This reduced TPS's speed and increased the gas fees that the users had to bear. As the demand increased, the efficiency decreased, the power consumption increased.
Even after the merge yesterday, today the current transactions per second (TPS) of Ethereum while writing the article was 22 tps.
This can be checked here:
This is very very tiny as compared to other networks and even as compared to Visa as well.
Besides this, Ethereum is the largest network for NFTs as well. NFT is predicted to be one of the front-runner use cases of blockchain technology.
However, NFTs were criticized for being operational on a non-environment-friendly consensus mechanism.
The current market cap of NFTs trading on all chains is approximately $2 billion and is expected to rise to $80 billion as per an American multinational investment bank by 2025.
The Ethereum merge to the POS consensus silences all the critics as well as paves way for faster TPS going forward.
The merge will reduce the power consumption on the network by ~ 99.95%.
The world of Ethereum post-merge.
1- Expecting reduced gas fees
The common man practically is here to look for his personal benefits more as compared to the environmental benefits.
The gas fees are determined by the network capacity. The eth merge doesn’t bring any change to the network capacity and so we cannot expect any reduction in gas fees as of now.
However, a process called sharding will be implemented in the coming years and that would increase the network capacity allowing multiple chains to horizontally take off the load carried on the main chain.’
2- Increased speed of transactions?
Sorry folks, the speed of transactions is going to increase, but it’s almost unnoticeable. The TPS depends on the block size, block time, transaction fees & network traffic.
It is just not as simple that a faster block time means a better network because although the TPS would increase, but the security would be compromised.
Every drawback is expected to get better with future upgrades as the Ethereum cofounder has been living the long-term dream for Ethereum since its inception.
However, according to the Ethereum foundation as well as from a blockchain maximalist perspective, the Ethereum merge was truly an exciting step in realizing the Ethereum vision—more scalability, security, and sustainability.
For now, users can ensure that nothing literally has changed from a retailer’s perspective.
As published on their official website
The Merge did not change anything for holders/users.
This bears repeating: As a user or holder of ETH or any other digital asset on Ethereum, as well as non-node-operating stakers, you do not need to do anything with your funds or wallet to account for The Merge. ETH is just ETH. There is no such thing as "old ETH"/"new ETH" or "ETH1"/"ETH2" and wallets work exactly the same after The Merge as they did before—people telling you otherwise are likely scammers.
Despite swapping out proof-of-work, the entire history of Ethereum since genesis remained intact and unaltered by the transition to proof-of-stake. Any funds held in your wallet before The Merge will are still accessible after The Merge. No action is required to upgrade on your part.”
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