In the latest news in the cryptocurrency world, the Ethereum Merge and Bitcoin halving have become two of the most talked about topics. Let’s have a look at what they are in detail.
The Ethereum Merge is one of the most significant and anticipated upgrades in the cryptocurrency community — a history in the making. The long wait is finally over: after many years of work and patience from crypto investors, the Merge is finally complete. The Merge was a success and marks the start of a new era for the world’s second-biggest blockchain. We’re here to break down the details of the merge and what kind of impact it will have on miners.
The Merge is defined as a final shift from proof of work (PoW) to proof of stake (PoS). In simple terms, the Merge can be defined as an upgrade to its existing system. This drastic upgrade means the network’s energy usage will be reduced by a whopping 99.95%. Since so many crypto networks have historically been criticised for being energy-intensive, this takes Ethereum several steps ahead of the others. Ethereum is not new to this upgrade: in 2020, proof of stake network was introduced but was not functional for processing transactions. Co-founder of Ethereum Joseph Lubin said that “he believes the transition will result in very little disruption to developers and users and will be as smooth as if your iPhone or laptop has upgraded its operating system overnight.”
According to Cryptopotato in order for the Merge to take place there were five stages put in places:
- The Merge: This is the transition stage from PoW to PoS
- The surge: This stage is designed to spread the computational load on mainnet, called the “shards”
- The verge: The upgrade phase which involves an upgrade to Merkle proofs and is intended to optimize data storage.
- The purge: This is the upgrade phase that reduces hard drive space required for the validators, streamlining network congestion. It also involves the transferring of data held on Ethereum’s mainnet to the beacon chain.
- The splurge: The final upgrade stage is intended to deliver a string of miscellaneous updates that are made to ensure overall smoothness of how the network runs.
To mark the occasion, EthBerlin in Germany threw a massive celebration to honour the milestone launch. Others watched online in anticipation for the countdown to reach zero via various watch parties. For more information regarding the Ethereum Merge or official update Bitcode Method has you covered.
The ins-and-outs of Bitcoin halving
One other significant event in crypto news is Bitcoin halving. Other cryptocurrencies do undergo halving and their dates for such events differ, so we will focus on Bitcoin halving.
Halving is defined as mining rewards being slashed by half. According to a Forbes article Bitcoin halving is when Bitcoin mining is cut in half, and halving takes place every four years. The halving policy was written into Bitcoin’s mining algorithm to counter inflation by maintaining scarcity.
Bitcoin is considered a first generation blockchain. The first Bitcoin halving occurred on 28 November 2012, the second one occurred on 9 July 2016, and the latest was on 11 May 2020. The next Bitcoin halving is expected to occur in early 2024 with others already kicking off its countdown. Bitcoin halving is significant because it ensures that coins are issued at a steady pace and also takes into consideration the inflation rate.
Bitcoin halving has already proven to be a success as it has happened more than twice. However, Ethereum investors are worried about the risk that may be involved,such as technical errors like unforseen bugs with the new blockchain. Security compatibility, if PoS, will be as secure as PoW.
But with that being said, the Merge without doubt is the most considerable moment in the history of cryptocurrency and will serve as an example or a guiding tool for other cryptocurrencies when they are due for an upgrade. Once again we congratulate Ethereum on such a successful merge.