Ethereum finally switched to proof-of-stake, which is a major milestone for the entire industry
Ethereum Merge long-awaited and highly-anticipated has been activated. The massive update switches the second-largest cryptocurrency by market cap from a proof-of-work consensus model to proof-of-stake.
ETH/USD 4-hour chart | Source: TradingView
Ethereum Successfully Executes Highly-Anticipated Merge Event
The upgrade has forever changed both how ETH is created and how transactions on the Ethereum network are validated. Up until the moment of the merge, ETH was generated by “mining,” an energy-intensive process by which individuals directed huge amounts of computer power at difficult-to-solve puzzles. Proof of stake is a mechanism by which new ETH is instead generated by individuals and entities pledging large amounts of pre-existing ETH. The transition is anticipated to be faster, more scalable, and over 99% more environmentally friendly.
The Ethereum network missed just one block, and after 12 minutes and 48 seconds, which refers to two epochs (periods of 32 slots each), successfully reached finality—the key benchmark of whether the merge had succeeded.
The Ethereum Foundation said the number of new ETH entering the market will witness a major drop:
- About 13,000 ETH were issued per day before the merge – a number that will now drop to about 1,600 ETH per day.
- One thing the update will not do, however, makes the cost of doing business on the Ethereum network more affordable.
- Transactions will not see a significant drop in fees until further updates are implemented down the road
- The speed of the network is also expected to essentially remain the same as before the update was implemented.
After purging miners from the network and replacing them with stakes, Ethereum’s difficulty and hashrate now stand at zero, according to data provided by CryptoQuant.
$ETH difficulty and hashrate are now at 0
Live Chart https://t.co/RH8VHcyoBX pic.twitter.com/4MniUc4xOh
— CryptoQuant.com (@cryptoquant_com) September 15, 2022
Crypto exchanges have detailed a variety of ways they plan to handle a fork, from listing the coin for trading the moment a fork happens to thoroughly reviewing the forked coin as if it were any other asset.