The Merge has redesigned the economics of Ethereum, leading to significant deflationary pressure on ETH.
Anybody can verify the state of a Merge-enabled Ethereum blockchain, making it more transparent. Blockchains are designed to be immutable, meaning they cannot change over time. This property is called censorship resistance, and it’s one of the most important features of blockchain technology. Theoretically, once a transaction has been recorded on a blockchain it cannot be altered or deleted by anyone – even the person who made the transaction! But while this immutability is great for cryptocurrency transactions and record keeping in general, it also means that any errors made by miners or other network participants will remain forever as part of the permanent record on your chain. With that being said though, there are ways to fix these issues such as through soft forks.
Block time is now constant with an average of 12 seconds
This means that block times are now constant with an average of 12 seconds. On the proof-of-work chain, it was an average of 13 seconds but it was random and could be as long as 15 or 16 seconds. Proof of stake allows a very regular cadence and never has to wait more than 12 seconds to get a transaction into a block.
The PoS Chain is working as expected
The PoS chain has been operating smoothly and there have been no replay attacks. This means that when someone sends a message with their private key from one chain to another, the transaction will not be valid on both chains at once (which would cause the sending party to lose money). The PoS chain has also experienced no broken chains or forked chains, which means that all transactions on it are safe and valid, even if they were sent before block 1 million (the end of Phase 2).
Two months after the Merge I wanted to know if The Merge went well and what will be the next for Ethereum network, I asked Ben Edgington, Product Lead for ConsenSys’ Eth2 validator a couple of questions about it.
What is the number of miners before the merge and how many are still mining on the PoW fork?
Mining activity is quantified in terms of hash rate. Immediately before the Merge, Ethereum’s Proof of Work hash rate was around 900 Tera-hashes per second. The current hash rate on ETHPoW looks to be around 20 TH/s and declining.
If PoS helped reduce electricity consumption and pollution with the construction of rigs or GPU, what is the impact of running a node at home?
A Proof of Stake node can run on very simple, standard, low-power equipment, such as a basic mini-PC or even a Raspberry Pi. A home staking rig consumes only the energy of a small appliance, such as a WiFi router, and staking from home is not only practical but very cost-effective.
On which network did the miners went after the PoS switch?
We can only but speculate as to where miners went after the transition to Proof of Stake but what is clear when analyzing hash rate immediately after the merge is that most miners, at least 76% of the network switched off after the merge and all things considered we have had a 0.1% reduction in global electricity usage. Our efforts have been focused on ensuring that withdrawals are enabled, attracting more validators, and increasing the decentralization and security of the network.
Short explanation of ultra-sound money
Ultrasound money is an Ethereum meme, referring to the EIP-1559 proposal’s burn mechanism that could result in Ether’s supply becoming deflationary after more Ether is destroyed than created. Ultrasound money is an asset with a declining total supply (deflation), and (value) increases over time.
How was the CO2 calculated?
ConsenSys commissioned a report from CCRI (Crypto Carbon Ratings Institute) that aimed to objectively determine the electricity consumption and carbon footprint of the Ethereum network and how the transition to Proof of Stake reduced the electricity consumption and carbon footprint of the Ethereum network by over 99.988 % and 99.992%, respectively.
In carrying out this research, CCRI used established literature and methodologies for the Proof of Work component, while the Proof of Stake assessment was conducted using a research framework developed by CCRI and adapted for Ethereum’s specific landscape
How will Ethereum be able to reduce to the minimum its carbon footprint?
The Merge transformed Ethereum into an almost net-zero technology positioned for sustainable future growth, reducing overnight its carbon footprint by over 99.99%.
While this was a one-time event, the network is now 2000x more energy efficient. To put it into perspective, the network previously consumed the total amount of energy of the Netherlands and is now consuming no more energy than a small American town.
Ethereum community showed that technological decisions that massively reduce carbon output can happen among many individuals and companies with different interests across the world; the slow progress of nations to decarbonize in line with the Paris Agreement underpins the necessity to act now and follow the example of Ethereum.
The Merge is not just an update, but a redesign of the Ethereum network that makes it greener than ever. The new chain will be faster and more secure, with constant block times and no dependence on mining equipment. PoS Chain also has many benefits such as energy efficiency and lower transaction costs which make it ideal for businesses looking to invest in blockchain technology.
The carbon footprint of the Ethereum network is a concern, but it’s not insurmountable. In order to address it, the Ethereum community needs to be proactive about finding solutions for reversing this trend. The ECP should be able to find some of these solutions by giving financial backing to projects focused on climate change and decarbonisation. Projects like these could help make a difference in the long run, even if they don’t immediately reverse things.