The Ethereum Merge Has Changed Cryptocurrency Mining Forever
✍️ 15 September, 2022 - 17:51 👤 Editor: Jakub Motyka
- After a long waiting period, the Ethereum Merge is now a fact.
- With the change of consensus method, there has been a large migration of miners to other PoW networks.
- What will happen to the Ethereum blockchain from now on?
Ethereum (ETH), the second largest cryptocurrency in the world, has completed its update, The Merge, changing mining forever. This represents an important change for the way it operates, as it no longer depends on miners to protect its network. With the move from PoW to PoS consensus method, it has managed to control its carbon emission to minimal levels. This will make it more attractive to countries and institutions interested in leading a green economy.
Through his official Twitter account, Vitalik Buterin, the acclaimed founder of Ethereum, pointed out that the update had been completed this Thursday . With this, the blockchain technology of the Ethereum network has abandoned the energy-intensive model of its rival Bitcoin, to a more efficient one.
What Does It Mean For The Crypto Mining That Ethereum Moved To Proof of Stake With The Merge?
The first part of the update (The Merge) began on September 6th with Bellatrix. During the process, a hard fork was carried out that allowed to migrate the Ethereum consensus method from Proof of Work (PoW) to Proof of Participation (PoS). The new Pos model has an energy consumption that is 99.9% lower than the PoW, due to a change in the mechanism in charge of carrying out the transactions and signing the new blocks.
The PoW system is similar to a competitive game in which many operators or miners try to guess a transaction number, and win a fixed amount of cryptocurrency. This requires a global network of computers to execute mathematical processes simultaneously, burning energy in the process. The new Ethereum PoS system, after the Merge, will depend on the amount of ETH locked feeding the validator nodes. The rewards for helping to carry out the transactions will be distributed among the responsible nodes, based on their participation.
What Will Happen To Ethereum Now That This Step Has Been Completed?
One of the most important effects of the migration to PoS is the reduction of the energy expenditure necessary to maintain the Ethereum network. This could change the narrative around cryptocurrencies and their environmental impact, encouraging institutional investors to base their projects on the Ethereum network, such as centralized exchanges and CBDCs. In addition to this, all the negative media attention will go only to Bitcoin, for continuing to use the PoW method.
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