The Ethereum Merge

The Ethereum Merge


A lot of people are wondering what is the Ethereum Merge and what does it mean? To put it bluntly, Ethereum has been using two parallel blockchains, Mainnet and Beacon Chain. The Merge, well, merged the two together. 


Simple Explanation of the Ethereum Merge

Ethereum’s original blockchain, Mainnet, ran via a Proof-of-Work (PoW) mechanism, which uses computers across a decentralized network to verify transactions.  In December 2020, Ethereum added a second blockchain, Beacon Chain, that ran by a different mechanism called Proof-of-Stake (PoS).  Coinbase defines PoS as relying on “validators that contribute their own token, in this case ETH, as collateral in exchange for a chance to update the block chain with the latest verified transaction and earn newly minted tokens.”  PoS limits the amount of users on each block, therefore it is more energy efficient than PoW.  As a result, Ethereum decided to run solely on Proof-of-Stake so the need for The Merge transpired. 

Image by Ethereum via

The Ethereum Merge converted the Ethereum blockchain from a Proof-of-Work system to a Proof-of-Stake system. Essentially, the blocks that make up the Mainnet are still there, but new blocks will only be added using PoS.


Why is the Ethereum Merge important?

In a Press Release, The White House stated, “As of August 2022, Bitcoin is estimated to account for 60% to 77% of total global crypto-asset electricity usage, and Ethereum is estimated to account for 20% to 39%.” The Ethereum Merge immediately reduced Ethereum’s energy use by 99.95% making a huge dent in crypto’s environmental impact.  In turn, this might put pressure on its number one competitor, Bitcoin, to do the same. 


What does the Ethereum Merge mean for ETH?

Users and holders of ETH don’t need to take any further action to protect their ETH regarding the Merge.  However, ETH owners should always store their ETH offline in a hardware wallet to protect it from hackers.  Secure hardware wallets for ETH include Trezor Model T, SecuX V20, and Ledger Nano X.  Scams could be on the rise with hackers taking advantage of the Merge.

All in all, the Ethereum Merge made the Ethereum blockchain more energy-efficient, improved the blockchain’s security, decreased barriers for entry, and paved the groundwork for future upgrades to make it faster and more scalable. 

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