13 Sep 2022
The calm before The Merge
Ethereum, the second biggest cryptocurrency by market cap, is expected to complete its transition from Proof of Work (PoW) to Proof of Stake (PoS) around September 15, 2022. We provide a brief on what the merge will mean in practice.
Last week, Bellatrix was activated—the last major update before the merge—and enables Ethereum consensus layer clients to execute transactions on the Beacon chain.A brief on what the merge will mean in practice:
It will: 1) Immediately reduce Ethereum’s energy demand by 99.95%, 2) Allow for future upgrades that will make it faster and more scalable, and 3) Reduce ETH issuance by ~90%*. It will not: 1) Create another blockchain called “Ethereum 2.0”, 2) Create a new Ethereum token called “ETH2”, or 3) Lower the cost of ETH transactions.Related reading - market angle ahead of merge: ETH hedging in perpsETHPOW hard fork struggling while ETC stays strong