What is the Ethereum Merge?

5 min readOct 3, 2022

The new Ethereum upgrade has generated a lot of curiosity recently. Let’s look at the Ethereum upgrade and how it will make the Ethereum blockchain more efficient.

Ethereum is one of the most popular crypto tokens in circulation. The Ethereum blockchain has revolutionized the cryptocurrency ecosystem with exciting possibilities. Ethereum ranks second in market capitalization, only behind Bitcoin.

Currently, the Ethereum blockchain uses the Proof-of-work (POW) consensus mechanism. The Bellatrix upgrade is the first stage of the Merge process and began on September 6th. The Ethereum network will convert to a proof-of-stake (POS) mechanism. It is said that this transition will improve the efficiency of the Ethereum blockchain by 99.5%.

Many upgrades will be made to the Ethereum blockchain during the transition, and all the upgrades are part of a complex development roadmap. The roadmap aims to make Ethereum the most sustainable, scalable, and reliable blockchain network.

What is the Ethereum Merge?

The transition from a Proof-of-work (POW) consensus mechanism to a Proof-of-stake (POS) of the Ethereum blockchain is known as the Ethereum merge. The current Ethereum network will combine with the Beacon network, which runs on the Proof-of-stake (POS) system as a part of the upgrade.

The main goal of the merge is to make the Ethereum blockchain more efficient. An efficient blockchain will help improve the scalability of the blockchain network. The chances of adoption will increase with scalability. The Ethereum merge will also make the blockchain more sustainable and secure.

This transition will stop energy-intensive mining and introduce staking on the Ethereum network. Imagine Ethereum as a high-performance car, and the change from the POW system to POS is like replacing the combustion engine with a more powerful and efficient electric engine.

Proof of Work vs. Proof of Stake

Transactions are validated based on the Ethereum staked by several validators in the POS consensus system. The energy consumption is almost 99% lower than POW, making POS a much more energy-efficient mechanism. Currently, users have to access the Ethereum main net to buy Ether. The transition to POS has been worked on by the Ethereum community since the blockchain was launched in 2015.

Currently, a decentralized network of computers competes to solve mathematical puzzles to validate transactions on the Ethereum blockchain. This process is known as mining, and the system behind it is known as proof-of-work. One of the big downsides of mining is that it is not environmentally friendly because of its high energy-consuming process. Cryptocurrencies like Ethereum and Bitcoin receive criticism because they use the proof-of-work consensus mechanism.

The Beacon blockchain was launched in December 2020 by Ethereum. The Beacon chain uses the proof-of-stake system and was a step towards the transition.

When is the Ethereum merge?

As a part of the merge process, two upgrades will be performed.

  • The Bellatrix upgrade was implemented and completed on September 6th, 2022. The aim was to bring the POS-powered Beacon chain layer of Ethereum to the current Ethereum blockchain running on the POW structure.
  • The Paris upgrade is taking place between the 13th and 16th of September, 2022. This upgrade will finally move Ethereum from proof-of-work (POW) to proof-of-stake (POS).

What happened before the Ethereum merge?

The Beacon chain protocol was executed before the Ethereum merge. Staking was introduced to Ethereum after this upgrade. A beacon chain is a ledger of accounts that links up with stakes. One uses the Ethereum validator software to solve complex puzzles to mine coins. Instead, users can now stake Ethereum, validate all transactions, and receive Ethereum coins as a reward. In the case of a bad actor/scammer staking crypto, the POS blockchain can easily detect and punish them.

What happens after the Ethereum merge?

Sharding is the next stage after the merge. The process of splitting data amongst the nodes of the network is known as sharding. This process will increase transaction speed and also reduce network congestion. According to its inventor, Vitalik Buterin, the Ethereum network has the potential to process close to 100,000 transactions per second in the future. This speed is exponentially higher than the current speed of twenty-five transactions per second. Depending on how fast the merged development unfolds, sharding of the Ethereum network is scheduled to take place sometime in 2023.

Sharding reduces the load on each node as it enables data to be distributed to other nodes. Thus, low processing power is needed to run a node. Lower processing power will help immensely in the decentralization of the blockchain because operating a node will be more affordable. If the sharding process is successful, users will be able to run nodes on their mobile phones and laptops in the future.

Preparing for the merge

Investors in Ethereum do not need to worry about their crypto assets. The holdings of investors will not be affected by the merger upgrade. Investors should feel optimistic as the merge upgrade will make the Ethereum blockchain super efficient. It will signal the beginning of a more sustainable blockchain solution and mark the end of the era of proof-of-work (POW) for the Ethereum blockchain.

The genesis and history of the Ethereum blockchain network will remain unscathed. The developments of the Ethereum blockchain might impact its users in the long term.

Misconceptions about the merge

  • There might be slight differences in speed, but there won’t be a big difference in transaction speed on layer one after the merge upgrade.
  • The gas fee will not reduce after the merge. The change in the consensus mechanism does not affect transaction throughput or network congestion. Thus, the gas fees will not change after the merge upgrade.
  • Netizens have assumed that the staking annual percentage rates (APR) will triple after the merge. The Ethereum community has denied this assumption of staking rates increasing tremendously. The estimate on the Ethereum website predicts a 50% increase in APR.
  • It is speculated that users will have no role in the merge upgrade. This speculation is false as users can be a part of the process by running a node or staking Ethereum. Users with technical knowledge can also be a part of the bug bounty program on the Ethereum blockchain.
  • The merge upgrade will not reduce downtime of the layer one blockchain, but the merge is designed to move Ethereum to a POS system with zero downtime.

Final Thoughts

The Ethereum merge benefits the network by making it more sustainable, decentralized, and scalable. The Ethereum merge development roadmap has been projected to dramatically reduce costs for using ETH. The merge upgrade will make the Ethereum blockchain technology more accessible to everyone. A successful merge upgrade will push more innovators to the Ethereum blockchain and help them build exciting future products.