On 15th September the Ethereum PoS transaction was completed successfully. That was a sign of the industry changes coming very soon. We can already see how vastly different the Ethereum network is now. 🙌
What is The Merge?
The Merge is the first stage of transferring Ethereum from a Proof-of-Work architecture to a Proof-of-Stake one.
With thousands of Web3 projects being based on the Ethereum blockchain and over 70 millions wallets tied to the network, the amount of calculations relying on the mining industry was insane, consequently consuming stupid amounts of electricity. 🤦♂️
The change was dramatic. According to preliminary estimates, the energy consumption has decreased by 96.3%. By August 2022, the annual network consumption stood at around 93.95 TWh. This is easily comparable to the “electro-appetite” of a large European state. Ukraine, being the biggest European country, has consumed just 92.2 TWh throughout 2021, for example. Current figures are at about 3.4 TWh annual consumption, which is roughly the same level as Botswana, which has just over 2 million people living there (And you have probably never heard about it before). 📈
Over the past 7 months, hackers have stolen 2 billion dollars worth of crypto and Ethereum is at risk too. The update has increased the security by roughly 4 times. 🔐
Justin Drake, one of the key figures in the ETH migration, claims a much higher degree of protection after the network upgrade. According to Justin, a potential attacker would need to take control over as much as 51% of the on-chain asset to organize a full-scale attack on Ethereum. 🛡️
Translating that into banknotes 💸:
The Proof-of-Work algorithm would require $5 billion for a crushing raid. The purchase of equipment, total energy consumption and human resources make for a significant price altogether, however…
Switching to Proof-of-Stake, as Buterin himself has mentioned multiple times, has automatically raised the stakes. Justin Drake has provided a theoretical price tag for a full-scale attack - 20B$, four times as much as the PoS one. 😳
When half the world governments are trying to ban crypto, big projects making big changes is lifebuoy for the whole industry. Ethereum, being the second biggest cryptocurrency has always been a role model for all the other blockchains, whether they are a part of EVM or use a completely independent algorithm. Ethereum is also the coin, those in power refer to when speaking about “Crypto Assets”, so the teams duty is to get loyalty, consequently moving the whole industry forward and seems like they completely understand the assignment. 😏
Even before Ethereum was transferred to PoS, the White House Office of Science and Technology Policy (OSTP) mentioned The Merge in the “Climate and Energy Impacts of Crypto Assets in the United States” report. 🇺🇸
Experts referred to The Merge as an example that demonstrates the not so obvious ability of switching to an environmentally friendly mode of operation crypto has. The Merge has given momentum to a new round of negotiations between the ones representing the crypto industry and the government of the United States of America. 🗣️
Merge was not only a technical update, but also an important political decision, bringing potential loyalty for all the other projects.
Stay tuned 📻