Introduction
The Ethereum merger upgrade is considered one of the more important events in the history of Ethereum and even cryptocurrency. It took only a few years of development and validation by many developers from the time it was proposed to the time it was officially deployed. The merger upgrade also changed the consensus mechanism of Ethereum network.
What is the Merge?
The Merge refers to the merger of the Ethereum Beacon Chain and the mainnet.
Launched on December 1, 2020, the Ethereum Beacon Chain has no transactions, tokens or DeFi applications on the chain, and is effectively an "empty chain". The beacon chain is simply a blockchain designed to stake ETH and operate with a PoS consensus mechanism.
With the completion of the merger, the Ethereum mainnet officially switched from a proof-of-work (PoW) consensus mechanism to a more energy-efficient Proof-of-Stake (PoS) consensus mechanism.
Proof of Work vs Proof of Stake
Proof-of-Work (PoW) and Proof-of-Stake (PoS) are two different consensus mechanisms used to reach consensus between blocks in a blockchain network.
Proof-of-Work, or PoW, is a common consensus mechanisms that requires miners to solve complex mathematical problems in order to add new blocks to the blockchain. Miners are rewarded for their work by completing mathematical problems, such as the Proof-of-Work used by the Bitcoin network, and miners who complete the task are rewarded with bitcoins in the block. But Proof-of-Work requires a lot of energy and computing power, making it expensive to run and causing controversy about the use of energy.
Proof-of-Stake, or PoS, is seen as a more efficient and secure alternative to proof-of-work. Nodes or users participating in the process are required to deposit and lock a certain number of tokens into the network that exist as their entitlement. The size of the entitlement determines the chance of selecting a node as the next verifier, with the larger the entitlement, the greater the chance. This reduces the cost of running a blockchain, as it does not require expensive computing power, and also drastically reduces the energy problems associated with Proof-of-Work. In addition, it reduces the risk of attacks by 51%, as users must have a large number of tokens on the network in order to control it.
Beacon Chain
Released in December 2020, the beacon chain is a new blockchain using Proof-of-Stake (PoS) to introduce Ethereum to the PoS consensus mechanism and is the first stage of the Serenity upgrade.
The beacon chain consists of shard chains, validators, attestations, committees, checkpoints, and finality, which are responsible for processing transactions, validating blocks, creating blocks, overseeing validators, etc. and so on.
The beacon chain introduces PoS mechanism to the Ethereum network, aiming to solve the problem of low efficiency and high energy consumption caused by proof-of-work, in order to optimize the Ethereum network. However, it is believed that the beacon chain is not directly connected to the operating Ethereum network, but operates in parallel with the original Ethereum blockchain, and blocks are issued independently without interfering with each other.
The significance of the Merge
The most important element of the Merge is to change the consensus mechanism of the Ethereum network from proof-of-work to Proof-of-Stake, which leads to a change in the way block data is verified. Since Proof-of-Stake does not rely on mathematical operations involving a large number of computers, it greatly reduces the energy consumption of the network, and it is expected that the energy consumption of the Ethernet network will be reduced by 99.95%.
However, the Merge is only one of the steps in the entire development roadmap of Ethereum, with four subsequent phases of Surge, Verge, Purge and Splurge. But the Merge is an important node in the upgrade roadmap of Ethereum, which carries forward and backward. By changing the consensus mechanism, the network security has been improved and the network operation is more energy efficient. The future Ethernet network has a long way to go.
Disclaimer
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Crypto investment involves significant risks. Please proceed with caution. The course shall not be considered investment or financial advice.
Next: Lesson 5 - Layer 2 on Ethereum Network