The long-awaited update to the Ethereum blockchain, the merge, will take place on Sept. 15. Let's unpack what the Merge is and how it might (or might not) impact your experience…
The goal behind the Merge is to upgrade the Ethereum blockchain from a Proof of Work (PoW) to a Proof of Stake (PoS) protocol, unlocking a more efficient consensus mechanism that will reduce the amount of energy consumption required to process transactions (by 99.5% compared to PoW). As an added benefit, this new method will reduce the economic barriers to participating in the validation of transactions.
The reason it is called a merge is based on the way the upgrade will be executed: via a merge between the Ethereum execution layer (mainnet) and the Beacon Chain’s Proof of Stake consensus layer.
As a decentralized technology, no one entity dictates the future direction of the Ethereum ecosystem. The Ethereum foundation manages the governance of the platform between its various stakeholders through an informal off-chain governance structure. While the changes will impact all stakeholders from ETH and NFT holders through to miners, the level of impact will depend on your involvement and role within the ecosystem (hint: if you are an ETH crypto or NFT holder, there will be no impact on your experience, nor any action items required).
The Merge has been in the works for years. However, the first concrete step toward transitioning to a Proof of Stake chain occurred in December of 2020 with the release of the Beacon Chain (consensus layer). Since its inception, the Beacon Chain has been operating as a separate chain from the mainnet. However, over the last few months, testing of the merge has been carried out on a variety of different testnets. Throughout the testing process, no significant bugs were detected and the final merge on the mainnet is expected to occur on Sept. 15.
Beware of scams
Official guidance from the Ethereum foundation recommends you proceed with extreme vigilance during the few weeks following the merge as an increase in scammers taking advantage of the uncertainty is expected. We encourage you to convey this information to your holders via relevant channels.
- The merge is happening on September 15th, 2022
- Ethereum is going from Proof of Work to Proof of Stake
- Proof of Stake will reduce energy consumption by 99.95% which will likely drive fast adoption of the technology
- The Merge will however not directly impact transaction fees but it paves the way for a more scalable infrastructure
- Although this does not impact your project directly, it's an important step in making the blockchain more energy efficient and scalable