Ethereum Merge: News and Freewallet updates

Lately, there has been a lot of buzz around the upcoming Ethereum Merge, the historic transition of the Ethereum mainnet from Proof-of-Work to Proof-of-Stake. We will tell you everything you need to know about it. But first, we want to certify the complete safety of your Ethereum-based tokens stored on Freewallet. We do our best to ensure the transition will not affect your funds. Now that we have clarified this, we can speak about the Ethereum Merge and its meaning.

  1. What Is the Ethereum Merge?
  2. Beacon Chain
  3. The Reasons For the Ethereum Merge
  4. Public Reaction to the Ethereum Merge News
  5. Final Thoughts

What Is the Ethereum Merge?

Ethereum Merge is the transition of the Ethereum mainnet from Proof-of-Work consensus protocol to Proof-of-Stake. This event will take place between the 13th and 15th of September. The Merge process itself will last for about 12 minutes. It will be the beginning of Ethereum 2.0.

The Ethereum development team has delayed the transition of the mainnet to PoS many times. It is not hard to imagine how tough it is to change the consensus mechanism for a blockchain ecosystem that hosts hundreds of decentralized apps and over half of the entire DeFi sector. Some call the Ethereum Merge the most significant event in the history of cryptocurrencies after the launch of Bitcoin!

Transition to PoS opens an opportunity to take part in transaction validation through ETH staking. Staking without an intermediary will be pretty demanding as the minimum stake is 32 ETH. However, Binance has already developed a low-barrier solution that allows users to stake as little as 0.001 ETH. We believe other similar initiatives will follow. After all, many people who do not have 32 ETH want to stake Ether, too.

Beacon Chain

This transition was planned several years ago. In 2020, Ethereum launched a layer called the Beacon Chain. The layer is separate from the mainnet. The Ethereum development team uses it as a testing ground. After numerous corrections and upgrades, Ethereum has decided to switch to PoS in September 2022.

The Beacon Chain is operating using the PoS consensus mechanism. The Ethereum Merge connects the mainnet to the Beacon Chain and stops all Proof-of-Work activity. ETH mining will cease as a result. After the Merge, the Beacon Chain will be used to prepare for sharding, which is aimed at solving Ethereum’s scalability issues.

The Reasons For the Ethereum Merge

The Ethereum Merge aims to cease the network’s environmental impact by applying the PoS protocol. Also, the Merge will result in a small improvement in transaction speed. Now, Ethereum can process 10 to 13 transactions per second. Think of how many crypto assets are based on Ethereum. For comparison, Visa performs 24k transactions per second.

Now, speaking of why Ethereum needs to be greener, PoW makes Ethereum very harmful in terms of ecology. The Ethereum network consumes as much energy as Finland or the Czech Republic. Three-fourths of the world’s countries consume less energy than Ethereum. The network produces around the same amount of carbon emissions as Switzerland. Fortunately, the switch to PoS will cut Ethereum’s carbon emissions and energy consumption by over 99%.

Another positive outcome of the transition to PoS will be a slight increase in the network speed. Instead of 10 to 13 TPS, Ethereum will have a stable rate of 12 transactions per second. However, the end users will not notice the difference. The actual speed improvement will take place after the sharding phase.

Public Reaction to the Ethereum Merge News

Although some people are afraid that the transition will not be smooth, it is doubtful that Ethereum will fail. According to the platform’s representatives, no one will notice anything unusual, even within 12 minutes of the transition process. At worst, they admit, several-minute transaction delays can occur.

Even though over 60% of the Ethereum network hash rate is distributed between just three mining pools, the transition to PoS is believed to be a step towards centralizing the Ethereum network. Skeptics say cases of on-chain censorship and an increase in network attacks will follow.

All in all, the public reaction to Ethereum Merge is a mixture of the good old PoW vs. PoS debates and the fear of the unknown. Interestingly, the latter should not be the case as we have all known Ethereum for a long time, and this brand deserves trust. In no way can it stain its reputation or damage its ecosystem. More than that, we have already witnessed a number of successful PoS-based networks. As for the pros and cons of PoW and PoS, we will not contribute to this debate here, especially when the decision has already been made.

Final Thoughts

In conclusion, we want to remind you that if you store Ethereum-based funds on Freewallet, please rest assured that we will do our best to ensure their safety during the Ethereum Merge.


Share:

Rate:

1 / 5. 1


Related