What is The Merge?
The Merge is an event that changed the consensus mechanism of the Ethereum blockchain. It shifted it from Proof of Work (PoW) to Proof of Stake (PoS).
The Long Definition
The Merge is an on-chain event executed on September 15, 2022. It involved merging Ethereum’s mainnet with the Beacon Chain. This merge upgraded the blockchain from the original PoW consensus mechanism to a PoS one. That way, the protocol’s energy consumption was reduced by 99.95%.
How Was the Merge Executed?
The Merge was in the works for several years before it was finally executed. Its goal was to turn Ethereum into a proof-of-stake blockchain. This finally happened in mid-September, 2022.
It was executed by bringing Ethereum’s mainnet and the Beacon Chain together. The Mainnet is the execution layer of the Ethereum blockchain. It’s where transactions on the protocol take place. This layer has been live since Ethereum was launched back in 2015.
The Beacon chain, on the other hand, is the consensus layer. It is where transactions are verified before being written to the blockchain. This happens through a Proof of Stake (PoS) consensus mechanism that the consensus layer introduced.
The Beacon chain was created in December 2020. However, the merge didn’t happen immediately. The Beacon chain ran parallel to the original Ethereum blockchain for the next two years. During this time, Ethereum engineers tested the chain to ensure that its PoS mechanism works flawlessly.
A few days before the Merge, the protocol implemented the Bellatrix upgrade. This was an update to the Ethereum Virtual Machine (EVM). EVM is a decentralized worldwide virtual computer that hosts smart contracts and decentralized apps. Upgrading it paved the way for the Merge.
Why is the Merge Important?
The Merge changed Ethereum’s consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS). PoW is the original blockchain consensus mechanism. It was first used by Bitcoin and later adopted by Ethereum when the blockchain launched in 2014.
PoW does a good job of securing a network. However, there is a problem. The consensus mechanism relies on miners, who require special equipment to mine blocks. This equipment, known as Application-Specific Integrated Circuit (ASIC) miners, consumes lots of energy.
As a result, the original Ethereum blockchain was energy-intensive. It consumes enough electricity to power a small country. And consuming that much energy not only made it expensive, it was also bad for the environment.
PoS does away with miners. It, instead, uses validators. These are participants who stake their Ethereum in exchange for an opportunity to verify transactions and write them on the blockchain. A validator doesn’t need complicated machinery to work. A midrange computer with a good internet connection can do the job just fine.
So, moving to a PoS consensus mechanism made Ethereum an energy-efficient blockchain. Today, it uses 99.95% less energy than it did before the Merge.
However, while The Merge solved Ethereum’s energy problem, it didn’t make it scalable. Scalability refers to the ability of a blockchain to handle more transactions per second (tps) as the demand arises. The blockchain’s throughput remained the same before and after The Merge– 15 to 30 tps.
What The Merge did is lay the groundwork for future scalability upgrades. One of these is sharding. Sharding is a form of database management. It involves splitting a database into multiple smaller pieces in order to make a system faster.
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