The Merge makes Ethereum much more eco-friendly
The Merge aims to address one of the biggest criticisms of Bitcoin, Ethereum and other proof of work cryptos. Transactions with Ethereum are very expensive and require a lot of energy. But what exactly is The Merge?
The Merge: from Proof of Work to Proof of Stake
The very first cryptos, such as Bitcoin and Ethereum, work according to the Proof of Work principle. That means that you can earn these cryptos by performing heavy, complicated calculations. Calculations require a lot of computing power and computers use a lot of electricity.
It is estimated that crypto miners use as much energy as a medium-sized country. This is a thorn in the side of eco-activists. Users of these cryptos are also not happy with this, because it costs a lot of money to make a payment in these cryptos. That is of course a problem if you want to form an alternative to the banks.
That also explains why Proof of Stake cryptos are becoming more and more popular. With these cryptos you can earn new cryptos by investing your existing cryptos in a so-called pool. The Merge also makes Ethereum a PoS crypto.
How does Proof of Stake work?
With this you give, as it were, the guarantee that your cryptos are used in a bona fide way to mine new cryptos. If you cheat and the algorithm finds out, you will lose your stake, your cryptos.
The main advantage of this technique is that it takes much less energy to mine cryptos and also to use them. This also explains, for example, the popularity of Solana, whose payment costs are extremely low. The Merge is going to turn Ethereum into a Proof of Stake crypto. This means that paying with Ethereum will become much cheaper.
How exactly does The Merge work?
The existing Ethereum blockchain, Ethereum 1.0, still works via the Proof of Work principle. This needs to be moved to the more advanced Beacon chain (the Proof of Stake blockchain of Ethereum 2.0). Within the community, the vast majority want to switch, because everyone understands how hindering the growth of Ethereum the high transaction costs are. And competition from other altcoins is getting stronger.
As an existing Ethereum user, you don’t have to worry. Your Ethereum and other Ethereum compatible tokens will remain usable and accessible even after The Merge. Don’t fall for scammers who claim otherwise.
A more technical, in-depth overview can be found at the Ethereum Foundation.
