Ethereum has planned a major change to its core this week. On September 6, the Ethereum Blockchain planned a complete shift from the Proof-Of-Work (PoW) state to the Proof-of-Stake (PoS) state. The Proof-of-Stake state is known for being power-efficient in comparison to the proof-of-work. This new transition in the Ethereum blockchain is being termed the Etherium Merge.
The crypto world is not in a good shape currently. Many leading coins such as Bitcoin, Ethereum, Solana, etc., have all seen a significant dip in their value. This can be attributed to the growing inflation in the world which has pushed people to look for more reliable and low-risk investments. Ethereum is the second biggest cryptocurrency in the world, with a market cap of $191,296,740,442. Despite that, the value of Ethereum has decreased by almost 8% this week. Ethereum, which reached the valuation of around $4,700 in November 2021, has now fallen to the valuation of just around $1,600.
The planned Ethereum Merge is expected to further make the value of Ethereum volatile, causing it to fluctuate substantially in the coming days. The crypto community is fairly polarized by this decision. This especially includes the Proof-of-Work (PoW) miners, as this change is expected to impact them the most. Experts believe that the transition will impact Ethereum prices in the short term. But in the long term, the Ethereum Merge is expected to strengthen Ethereum. It is also expected to lead to the formation of more Ethereum forks.
Although the Ethereum Merge sounds good for Ethereum in the long run, it is an adverse decision for the PoW miners. Many PoW miners are planning to form a hard fork from Ethereum. A hard fork of a cryptocurrency is a significant change to the blockchain protocols to alter previously invalid transactions into valid ones. The miners are planning on making a hard fork of Ethereum which will be still running on the Proof-of-Work mechanism. The hard fork being planned is named the ETHPoW. Although shifting away from the second largest cryptocurrency is not an easy decision, it is a necessary step for the PoW miners to keep their source of income intact.
Despite the criticism, the decision of Ethereum to shift from Proof-of-Work to the Proof-of-Stake state is welcoming from the environmental perspective. This is because the Proof-of-Work state requires a tremendous amount of power which is nowhere near being environment friendly. The newly proposed Proof-of-Stake state requires an extremely minimal fraction of the energy used in PoW mining. As per Ethereum, almost 99.95% of the energy consumption will be reduced. Along with the power consumption, PoS mining also has a speed advantage over PoW mining. Using PoW mining, the current system can perform around 30 transactions per second. Upon implementation of PoS mining, the number of transactions being carried will bump up to almost 100,000. The reason for such a speed by PoS is sharding. Sharding allows for reducing the number of tasks per system, which prevents its slow-down, thus maintaining its efficiency. Etherium Merge: what does it mean for you?
Yash Ranjan09/02/2022
Ethereum has planned a major change to its core this week. On September 6, the Ethereum Blockchain planned a complete shift from the Proof-Of-Work (PoW) state to the Proof-of-Stake (PoS) state. The Proof-of-Stake state is known for being power-efficient in comparison to the proof-of-work. This new transition in the Ethereum blockchain is being termed the Etherium Merge.
The crypto world is not in a good shape currently. Many leading coins such as Bitcoin, Ethereum, Solana, etc., have all seen a significant dip in their value. This can be attributed to the growing inflation in the world which has pushed people to look for more reliable and low-risk investments. Ethereum is the second biggest cryptocurrency in the world, with a market cap of $191,296,740,442. Despite that, the value of Ethereum has decreased by almost 8% this week. Ethereum, which reached the valuation of around $4,700 in November 2021, has now fallen to the valuation of just around $1,600.
The planned Ethereum Merge is expected to further make the value of Ethereum volatile, causing it to fluctuate substantially in the coming days. The crypto community is fairly polarized by this decision. This especially includes the Proof-of-Work (PoW) miners, as this change is expected to impact them the most. Experts believe that the transition will impact Ethereum prices in the short term. But in the long term, the Ethereum Merge is expected to strengthen Ethereum. It is also expected to lead to the formation of more Ethereum forks.
Although the Ethereum Merge sounds good for Ethereum in the long run, it is an adverse decision for the PoW miners. Many PoW miners are planning to form a hard fork from Ethereum. A hard fork of a cryptocurrency is a significant change to the blockchain protocols to alter previously invalid transactions into valid ones. The miners are planning on making a hard fork of Ethereum which will be still running on the Proof-of-Work mechanism. The hard fork being planned is named the ETHPoW. Although shifting away from the second largest cryptocurrency is not an easy decision, it is a necessary step for the PoW miners to keep their source of income intact.
Despite the criticism, the decision of Ethereum to shift from Proof-of-Work to the Proof-of-Stake state is welcoming from the environmental perspective. This is because the Proof-of-Work state requires a tremendous amount of power which is nowhere near being environment friendly. The newly proposed Proof-of-Stake state requires an extremely minimal fraction of the energy used in PoW mining. As per Ethereum, almost 99.95% of the energy consumption will be reduced. Along with the power consumption, PoS mining also has a speed advantage over PoW mining. Using PoW mining, the current system can perform around 30 transactions per second. Upon implementation of PoS mining, the number of transactions being carried will bump up to almost 100,000. The reason for such a speed by PoS is sharding. Sharding allows for reducing the number of tasks per system, which prevents its slow-down, thus maintaining its efficiency. 
