Reasons Behind the Ethereum Merge
The primary motivation for the Merge was to remove the reliance on energy-intensive mining. Instead, the network is now secured by staked ETH. Both crypto supporters and critics have praised the lower energy usage, making Ethereum more eco-friendly. Other motivations behind the transition to a proof-of-stake consensus include:
- Improved decentralization with fewer hardware requirements for node operators
- Транзакция жылдамдығының жоғарылауы
- Making Ethereum a more deflationary asset
However, the Merge hasn’t completely achieved all its intended goals. For example, the speed and cost of transactions haven’t significantly improved post-Merge. Additionally, the network appears more centralized, as becoming a validator now requires 32 Ether.
Due to the high entry costs, many investors choose to pool funds together to become validators. This raises concerns that centralized entities could dominate the network, leading to potential issues like censorship.
On the positive side, two key achievements have been realized: reduced energy consumption and lowered Ethereum inflation. Prior to the Merge, around 13,000 Ether were mined daily. With the new system, approximately 1,700 Ether are issued as rewards daily, marking a 90% decrease.
Post-Merge Concerns for Ethereum
Following the transition to proof-of-stake, a few challenges have emerged. Aside from the risks of governance takeovers and censorship, the Merge has also made the network more vulnerable to potential attacks. This is because the network now informs node validators in advance about which transactions they will validate, giving attackers the opportunity to plan their actions.
In theory, this could become an issue if a validator manages to process two consecutive blocks. Such exploits are nearly impossible in proof-of-work blockchains due to the lack of advance information.
It is important to note that the Ethereum network has never been hacked, and this concern is considered highly unlikely. Proof-of-stake still offers reliable security.
Additionally, the price of Ether saw a significant drop following the Merge, partly because the switch didn’t resolve the congestion or high transaction fees. Many investors cashed out their Ether in response to the uncertainty surrounding the network. Experts emphasized that the Merge was not intended to solve every issue immediately but was simply a foundational step towards future improvements.
Another issue that arose after the Merge was confusion surrounding the coin. Given the constant references to ETH 2.0, some holders mistakenly swapped their Ether for ETH 2 coins, leading to lost funds as no new coin was introduced in the process.
ETH Issuance After the Merge
Prior to the Merge, ETH was issued through two separate layers: the execution layer and the consensus layer. Miners interacted with the execution layer, receiving rewards for solving blocks. This process, known as mining, was the energy-intensive backbone of the proof-of-work consensus mechanism.
The consensus layer was introduced in 2020 when the Beacon Chain went live. Users could deposit ETH into a smart contract on the Mainnet and receive an equal amount of ETH on the Beacon Chain. Validators were rewarded based on their performance, but these rewards were much lower than those offered to miners.
Post-Merge, ETH is now exclusively issued to validators who stake their cryptocurrency for rewards. The execution layer issuance was discontinued on September 15, 2022, the day the Merge occurred.
Қорытынды ой
Ethereum has been one of the most influential cryptocurrencies for many years. In September 2022, it officially transitioned to a proof-of-stake blockchain, ending the era of mining for new ETH. This shift led to an astonishing 99% reduction in the network’s energy consumption.
