The Ethereum Merge -misconceptions about the Merge
The merge is a remarkable feat for the Ethereum network but certain misconceptions has spurred rumors across the community.
Ethereum, the world's most valuable digital currency after Bitcoin, completed its long-awaited upgrade on September 15, 2022. In the upgrade, called the merge, Ethereum switched from using an energy-intensive consensus model to a more efficient system.
This is a remarkable feat, and most supporters believe that the "Merge" will have a long-term positive impact on Ethereum and the crypto industry as a whole. However, there have been certain misconceptions about the merge, which has spurred rumors across the community.
In this article, I explained the merge and some of the misconceptions to debunk.
Meaning of The Merge
The merge means the transition of the Ethereum network from a proof of work protocol to a proof of stake protocol. Ethereum previously relied on miners to validate transactions by solving difficult math puzzles, but, with the merge, the network moved to a proof of stake, which depends on validators to validate transactions by staking their ETH.
The proof-of-work model requires massive amounts of energy to power computers that compete to solve those puzzles, but the proof-of-stake model does not need heavy computers and is much more energy-conserving.
Achieving this Ethereum vision was truly an exciting experience for the whole community and for further advancement in the network.
What the Merge means for Ethereum
1. 99.95% Energy Cut
The switch to proof-of-stake by Ethereum cut its energy usage by 99.95% since the protocol consumes lesser power. Users who want to partake in the validation process stake their ETH instead of PoW's computing power.
2. Scalability through sharding
Sharding is basically an attempt to split the Ethereum network into "shard chains" that share the load of Ethereum, supposedly reducing congestion and boosting transaction throughput.
Once sharding is adopted as promised by Vitalik, Ethereum's transaction throughput will rise to 100,000 transactions per second. Sharding is planned to start in 2023.
3. More secure and decentralized network
Ethereum now requires a minimum of 16,384 validators, making the network much more decentralized and secure since more individuals can participate.
Misconceptions about the Merge
1. The merge will lower gas fees
One of the greatest misconceptions circulating among investors is that the merge will reduce Ethereum gas fees. While this might be possible in future, the merge was a switch of consensus mechanism, not an increase of network capacity, and was never designed to reduce gas fees.
2. The merge enabled withdrawals of staked ETH
Staking withdrawals are not yet functional with The Merge, and assets will be locked and illiquid for about 6 to 12 months post-merge. But in anticipation, withdrawals of stETH will be enabled after the coming Shanghai upgrade.
3. Ethereum transactions will be faster
Transaction speed on Ethereum is still almost as before. Although the Beacon Chain allows validators to publish a block every 12 seconds, which on the mainnet was about 13.3 seconds, this was a slight and unnoticeable change.
4. Ethereum blockchain will go down due to the merge
Contrary to common belief, which predicts favorable effects for Ethereum from The Merge, a rumor has claimed that the scheduled upgrade will bring down the Ethereum network instead.
However, we don't expect any downtime as the blocks go from using PoW to PoS.