Early on 15 September 2022, the long-awaited Ethereum Merge was completed, switching the world’s second most popular cryptocurrency from the energy-guzzling proof of work (PoW) consensus algorithm to the more environmentally friendly proof of stake (PoS).
It’s a momentous occasion. Never before has a blockchain transitioned from PoW to PoS, and the move will reverberate around the world—not just the world of crypto—for some time.
But the big questions are still to come. Questions like, will Ethereum increase in price after the Merge? And will the Merge actually make Ethereum faster?
Here are seven things you need to know about the Ethereum Merge.
1. What Is the Ethereum Merge?
The Merge is the official name of the Ethereum blockchain’s transition from PoW to PoS. Like Bitcoin, Ethereum is well known for its environmental impact, requiring more power than numerous large countries to keep its blockchain up and running and secure. After switching to PoS, it is thought Ethereum will consume 99.9 percent less energy.
As gratuitous energy waste is one of the main criticisms of cryptocurrency in general and specifically NFTs (many of which are minted on the Ethereum blockchain), that the Merge will tackle one of the biggest consumers is likely to go down well across the board.
2. When Did the Ethereum Merge Happen? Is the Merge Complete?
The Ethereum Merge took place on 15 September 2022.
The Merge took years of planning, but as soon as the Ethereum blockchain hit the correct Total Terminal Difficult (TTD) of 58,750,000,000,000,000,000,000, the transition was instantaneous. There was no pause to boot up different software or load something else; the transition was automatic.
TTD is the total difficulty sum of all blocks ever mined on the Ethereum blockchain. Crypto mining difficulty is as it sounds: the difficulty for mining hardware to find the next block in the blockchain using the unique hash. Blockchain difficult adjusts automatically based upon the hardware processing power verifying transactions.
3. Will the Ethereum Merge Increase Ethereum’s Price?
At the time of writing, after the completion of the Merge, there hasn’t been a significant boost to the Ethereum price. While that may be a disappointment for those who expected a sudden surge, most experts long predicted that the price probably wouldn’t move much, despite the hype surrounding the event.
In the long term, Ethereum 2.0 will become a more deflationary-focused crypto, with the Ethereum block reward falling. Prior to the Merge, around 13,000 Ether were issued per day. After the Merge, that figure falls to around 1,600 Ether per day.
4. Will the Merge Speed Up Ethereum Transactions?
Again, some users might find this disappointing, but no, the Ethereum Merge isn’t going to speed up Ethereum transactions. At least, not by much. Before the Merge, the Ethereum blockchain released one new block every 13 or 14 seconds. After the Merge, that number is expected to fall—to 12 seconds.
5. Will the Merge Reduce Ethereum Gas Fees?
That’s another no. Ethereum’s notorious gas fees are unlikely to fall straight after the Merge completes. It won’t be until Ethereum 2.0 implements blockchain sharding that users see a reduction in on-chain gas fees.
6. What Is the Merge Good For? What’s the Point in the Ethereum Merge?
The biggest change for the Ethereum blockchain is the wider rollout of staking for Ethereum users. You can now stake 32ETH to become a validator on the Ethereum network, helping to process transactions and secure the network while earning a staking reward.
And, as mentioned above, the reduction in energy consumption is also welcome.
7. Can I Use My Ethereum Now?
Yes, your Ethereum is free for use. There was no pause between the switch from proof of work to proof of stake. The only thing you may find is that some wallets and exchanges have locked your Ethereum holdings down while they update their sites and services, but it shouldn’t take them long to restore functionality.
The Ethereum Proof of Stake Merge Is Complete
It’s been years in the planning, and the Ethereum 2.0 Merge is finally done and dusted. Well, saying done and dusted isn’t all there is to it, as the switch to proof of stake is the start of a whole new chapter for Ethereum. As one of the underpinnings for Web 3.0 and as a blockchain that powers hundreds of crypto tokens, the benefits of Ethereum development inevitably ripple throughout the crypto world.