Ethereum Merge: The Network’s Revolutionary Upgrade Will Cut Mining Energy Usage by 99.9%
The highly-anticipated Ethereum Merge is finally going live, and is expected to revolutionize the blockchain industry by substantially reducing costs and energy usage.
The ethereum blockchain’s system-wide upgrade officially went live on Thursday, marking one of the most significant events in the crypto space. Dubbed the “Merge,” it will transition the ethereum network from a proof-of-work (PoW) model to a proof-of-stake (PoS) model by merging the blockchain’s PoS Beacon Chain with the existing Ethereum Mainnet. Now, blockchain miners will no longer have to validate coins by solving complex mathematical problems on advanced computers, but rather validators will leverage their own ether tokens (Ethereum’s native coin) to verify the transaction, ultimately securing the network.
The Merge is expected to cut back Ethereum’s energy consumption by 99.9%, solving a major criticism of the cryptocurrency industry. Moreover, now that validators have to put up their ether tokens and take them out of circulation, the overall supply will significantly decline, making the coins more scarce. In addition, a previous supply reduction upgrade that went live August 2021 is permanently eliminating some of the tokens that were otherwise slated to go back into circulation.
The price of ether has surged over 30% over the past three months, surpassing bitcoin by a large margin, which has fallen nearly 10% during the same period. A recent note by the Bank of America suggests the reduction in the Ethereum’s energy usage will be the focal point of the Merge, even attracting interest from institutional investors that otherwise shy away from token purchases from blockchains that run on PoW mechanisms.
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