The blockchain, which supports the world’s second largest cryptocurrency, is about to undergo a major upgrade.
There are several ways to think of this event, called a merge, because the two main aspects of the Ethereum platform are combined together. An existing chain and a relatively new chain.
It transforms the backbone of how people trade with ether, bringing about a transformation that could lead to a more environmentally friendly and safer future in this part of the crypto world. But, as some people explain it, it will be like replacing the engine of an airplane while the airplane is flying.
Marge “replaces these energy-intensive machines”
Ether, like Bitcoin, is created when so-called miners solve complex computational puzzles using a computer with a very fast processor. Once resolved, the transaction will be secure on the Ethereum blockchain.
The first miner to solve a given puzzle receives a reward payment in the form of ether. In recent years, the reward has been two ethers, which is over $ 6,000.
That is why critics are concerned about the environmental impact of cryptocurrencies.
Marge transforms Ethereum from this current model known as Proof of Work, We spell the end of Ethereum crypto mining in what is called Proof of Stake. Instead, a crypto owner holding a certain amount of ether can deposit or bet on it to become a so-called validator.
“This replaces these energy-intensive machines,” David Roant Research Director, Bitwise Asset Management, a crypto index fund, told insiders.
The more stakes you have, the more likely you are to organize people’s transactions on the Ethereum blockchain into blocks and be chosen as a validator to earn the rewards paid on Ethereum.
These validators use their own ciphers for staking and are motivated to get the job done better. If not, their bet ether will begin to soak. As a result, Proof of Stake advocates favor the model as a benefit of a better security validator to keep the network more secure.
In addition, fewer ether coins will be issued, increasing the rarity of virtual currencies.
Once the merge is complete, the Ethereum blockchain will be completely proof of stake. This is a chain called the Beacon Chain.
Experts predict that more institutional investors will be interested in this space as it becomes more secure and less likely to have a negative impact on the climate. Billionaire investor Mark Cuban himself recently told Fortune that he was “very bullish” on the merger.
So … when does that happen?
No one is completely convinced, but some developers predict that it will happen this summer. However, migrating to a new model involves complex engineering work, making it difficult to set a tight schedule.
“If you ask the Ethereum developers when the merge ships, they will say’when you’re ready,'” Roant said.