There are many clauses about what the merger brings to the table; some are true, while some are completely absurd!
A Brief History below.
The Ethereum network first graced our eyes in the year 2015. Ethereum's founder Vitalik Buterin started the development of the network back in 2013, believing that bitcoin's core developers 'came up short' on unleashing the full potential of blockchain technology.
A few years after its launch, Ethereum became the second largest cryptocurrency by market cap, behind Bitcoin. Due to Vitalik and his team's profound interest in taking blockchain technology to the next level, the dawn of decentralized applications and smart contracts became a reality.
Despite Ethereum's major strides in revolutionizing what was once a 'single purposed' blockchain virtual currency world, the network is beset with numerous issues. It is not news that Ether's blockchain still struggles with issues like scalability and security. However, the blockchain's developers are finding ways to overcome the challenges it faces today, with one viable option being the Ethereum merger.
You might be wondering what the future holds after the Ethereum merger. While it's still too early to say for sure, there are some things that we can expect. For one, the merger will make the Ethereum network more secure and sustainable, making it easier for developers to build on Ethereum. There are many clauses about what the merger brings to the table; some are true, while some are completely absurd. In this post, we'll break down the anticipated 'changes' that will not grace the Ether ecosystem after the highly anticipated Ethereum merger takes effect.
The Tale of Issues on Ethereum
While all seems rosy in the Ethereum blockchain, the platform has been clouded by myriad issues that compromise its usability. Some notable issues on the Ethereum blockchain include scalability issues, high transaction (gas) fees, and security challenges on certain DAO contracts used on the platform.
In an attempt to solve these issues and become more sustainable, secure, and sustainable, Ethereum is looking to switch from the Proof-of-Work (PoW) model to Proof-of-Stake (PoS). The infamous switch termed as Ethereum merger is one of the most significant and anticipated upgrades in the history of Ethereum.
With the Ethereum community highly anticipative of the merge, there have been increased myths and misconceptions surrounding the merge. Most narratives about the merger are inaccurate and misleading.
While it might be difficult to differentiate between a myth and an accurate fact, here is what you shouldn't expect after the highly anticipated Ethereum merger. But first, let's look at all the details about the merger below:
An In-Depth Look at the Ethereum Merger
Developers, even Vitalik Buterin himself, have termed the Merge a colossal upgrade in the history of Ethereum.
It involves linking the original Ethereum's Mainnet execution layer with a new PoS layer called the Beacon Chain. Currently, the Beacon Chain is a separate entity from the Ethereum Mainnet. It uses PoS consensus, unlike the Mainnet, which leverages PoW consensus to secure its smart contracts, accounts, balances, and blockchain state.
Think of the Ethereum Mainnet as a spaceship that isn't ready for a space mission because it lacks an engine. The Beacon Chain is the new engine that, if fitted into the spaceship, will make it mission-ready. The system has been developed and currently undergoing testing to confirm its efficiency before being fitted into the ship.
With the Merge, the Beacon Chain and Ethereum Mainnet will come together, and proof-of-work will be replaced permanently by a proof-of-stake consensus mechanism. This will eliminate the need for energy-intensive mining with the network achieving security using staked ETH. The end goal is to improve Ethereum's scalability, security, and sustainability.
Once the merge is done, the Beacon Chain will be the consensus engine for all network data, including transactions and account balances. It will also be the main engine of block production as mining will no longer be the means of producing valid blocks. PoS validators will be responsible for processing the validity of all transactions and proposing blocks.
Since Ethereum's Mainnet went live in July 2015, it has kept the entire history of every smart contract, transaction, and balance. The Merge won't erase this history-the entire transactional history of Ethereum will still be intact.
What not to Expect after the Ethereum Merger
Low Transaction Fees
One of the most pressing issues on the current Ethereum Mainnet is the high transaction fees.
As per Etherscan - a web platform that monitors activities on the Ethereum network, simple transactions such as buying NFTs on the market or swapping between tokens on Uniswap's decentralized exchange(DEX) cost upwards of $30 in transaction fees. Sometimes, the transaction fees may surge owing to network congestion. The more congested the Ethereum network, the higher the fees.
While most people expect that the Merge will lower transaction (gas) fees, this is totally false. The Merge is simply a change of consensus mechanism and not really an expansion of network capacity. Therefore, it won't result in lower gas fees since validators will take up an almost similar amount to process transactions.
Ethereum's original plan to lower transaction fees was to implement sharding which could split the network into pieces and consequently increase transaction throughput and decrease gas fees. However, following the boom in layer 2 scaling solutions, the network's priority shifted from swapping PoW to PoS via the Merge.
The focus has shifted from sharding to layer two technologies such as rollup contracts that will scale transaction executions even off-chain, facilitating exponential network growth. Besides, sharding is impossible without the network first transiting to a Proof-of-Stake consensus.
Therefore, with the much-awaited Ethereum Merger, don't expect a drop in transaction fees. The merge focuses on changing Ethereum's consensus from a PoW model to PoS, preparing the network for future scaling upgrades like sharding.
A New Ethereum Token
Following the Merge, you shouldn't expect a new token on the Ethereum network.
In its early days, the Merge was referred to as "Ethereum 2.0" or "Eth2." making people believe that there would be a new Eth2 token different from the original ETH.
Scammers had taken advantage of this misconception to scam users by having them swap their ETH for non-existent ETH2 tokens to migrate their token before the actual upgrade. However, the Ethereum Foundation and the blockchain's core developers issued a clarification on this issue, even phasing out the Ethereum 2.0 labeling.
Therefore, with the Merge, you shouldn't expect a new ETH token, i.e., ETH2. In fact, as mentioned above, Ethereum will maintain its entire history of transactions, smart contracts, and user balance.
Faster Transaction Speed
Just like the Ethereum merger won't lower the gas fees, it won't make the transactions any faster.
Transaction speed is a measure of the time taken for the inclusion and finalization of transactions in a block. On the current status of the Ethereum network, new blocks are produced after every 13.3 seconds, compared to every 12 seconds on the Beacon Chain. Following the shift to PoS, blocks will be produced 10% more frequently than on PoW. This is a fairly insignificant change and will hardly be noticed by users.
In essence, while the Ethereum Merger will cause some slight changes in the transaction speed, users will hardly notice these changes. Even so, transaction speed will mostly remain unchanged on layer 1.
Withdraw Staked ETH
You shouldn't expect to withdraw staked ETH once The Merge has taken place.
During and after the network migration, investors will not be able to withdraw their staked tokens, and newly issued ETH will still be locked on the Beacon Chain.
Staked ETH withdrawals will only be possible after the Shanghai Upgrade - the next major upgrade on the Ethereum network after The Merge. Newly issued ETH accumulating on the Beacon Chain will remain locked and illiquid for at least 6-12 months following The Merge until the Shanghai upgrade is done.
Ethereum Network Disruption
The Ethereum Merge is unlikely to cause downtime of the chain thanks to the enormous amount of work that has been put into ensuring the transition from PoW to PoS will be flawless and with zero downtime to disrupt the network and its users.
The Merge will be implemented using terminal total difficulty (TTD) that will see blocks going from being built using PoW to being built using PoS in the next. The Merge should occur faultlessly and with zero downtime.
The Ethereum Merger slated for summer 2022 will see the network transit from PoW to PoS consensus with the current Ethereum Mainnet merging with the Beacon Chain.
The Ethereum blockchain consists of an execution layer, a consensus layer, and a data availability layer.
The Merge is simply an upgrade of the consensus layer and will reduce Ethereum energy consumption by 99.95%, plus secure the network using staked ETH. Besides, it will pave the way for future scaling upgrades such as Shanghai and sharding.
Contrary to common misconceptions, The Merge won't lower the transaction fees, enhance transaction speeds, lead to the creation of a new ETH token or make staked ETH withdrawals possible. Nonetheless, it's a significant step in making Ethereum more scalable, secure, and sustainable. The Merge is in its final stages with plans to launch it on a few public testnets before finally carrying forward with Mainnet.
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