What is The Ethereum Merge?
Summary of The Ethereum Merge
- The Merge is the Ethereum blockchain's transition from a mining-based proof-of-work (PoW) blockchain to a more energy efficient, scalable proof-of-stake (PoS) system
- The Merge is expected to lay the technical foundation for future scalability improvements on the Ethereum blockchain
- ETH holders do not need to take any action before, during or after The Merge takes place
Ethereum Merge explained
The Merge represents a significant update to Ethereum’s current blockchain consensus mechanism. In short, the transition will see Ethereum shift from a mining-based proof-of-work (PoW) blockchain to a more energy-efficient, scalable proof-of-stake (PoS) system. This will be achieved by joining Ethereum’s mainnet with its PoS-based system, referred to as the Beacon Chain.
Ethereum, the industry’s second-largest cryptocurrency project by market cap, provides infrastructure for blockchain developers to build and deploy their own decentralized applications (dApps) and cryptoassets.
Prior to The Merge, transactions sent over the Ethereum network were verified and added to its blockchain via a PoW system. PoW involves cryptocurrency miners — who compete to verify transactions on the network — racing to generate a solution to a difficult (and therefore energy-intensive) mathematical puzzle. You can learn more about proof-of-work mining in our Learn Center article What is Bitcoin Mining?
After The Merge, Ethereum’s miners will be replaced by stakers, who lock up ETH for the right to validate transactions. In doing so, The Merge is expected to reduce energy usage on the network by more than 99.5%.
Additionally, The Merge lays the foundation for future upgrades planned for Ethereum. Proposed network scalability improvements, like sharding, can only work under a PoS consensus model. Sharding is a technique of splitting a blockchain into smaller, independent shard chains in order to reduce network congestion and increase transaction throughput. The implementation of sharding is planned during subsequent phases of Ethereum’s ongoing development roadmap.
What you need to know about The Merge:
Ahead of The Merge, a great deal of confusion still exists as to what exactly the transition to PoS entails and what it means for the future of Ethereum and its native token. We’ve prepared this FAQ section to answer the most common questions asked by the Ethereum community.
When is The Merge scheduled to take place?
What happens to my ETH after The Merge?
As an ETH holder, what do I need to do to prepare for The Merge?
Will I need to update my wallet or use a new wallet post-Merge?
Is Ethereum and Ethereum 2.0 the same thing?
Will The Merge affect my NFTs?
Will The Merge affect my crypto locked in DeFi protocols?
Can I still run an ETH miner?
Will the Ethereum network go offline during The Merge?
Will I be able to unstake my ETH?
Will The Merge have any impact on Ethereum Classic?
Technical factors (Network)
What is the Beacon Chain?
What is staking?
How is staking different from mining?
What exactly is happening during The Merge?
Will ETH transactions be processed faster after The Merge?
Will The Merge reduce gas fees?
Does The Merge update include sharding?
How will The Merge impact Ethereum’s energy usage?
Is there a chance forked tokens might be created during The Merge?
Will a new Ethereum token be created post-Merge?
How will The Merge affect Ethereum’s price?
Will The Merge impact NFTs, DeFi and other Ethereum-based assets/services?
Will ETH's staking APR rise after The Merge?
Will the Ethereum blockchain experience a hard fork ahead of The Merge?
What’s next on the Ethereum roadmap after The Merge?
What does ETH 1.0 and ETH 2.0 now mean?
What will happen to ETH miners after The Merge?
What do I need to know about the Shanghai upgrade?
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