What is The Ethereum Merge?
The Merge upgrade is Ethereum’s long-awaited migration from its current “Proof-of-Work” consensus mechanism to a “Proof-of-Stake” system. The Merge actually happens in a two-step process, which have been named the Bellatrix & Paris upgrades. The Merge was officially kicked off by Bellatrix, which took place on Sept 6th 2022 at 11:34:47am UTC. Bellatrix is a network upgrade on the consensus layer. Bellatrix will be followed up by Paris, which will be the execution layer that will transition Ethereum from proof-of-work to proof-of-stake. Paris will be triggered by a specific Total Difficulty threshold, called the Terminal Total Difficulty (TTD), which makes the exact date of Paris TBD since it depends heavily on the proof-of-work hash rate. TTD is the total difficulty threshold required of the final block mined in Ethereum. In other words, TTD represents the fixed number of hashes that are left to mine until Proof-of-Stake officially takes over.
What happens immediately after The Merge?
Once complete, the already-running Beacon Chain will take over the process of validating new transactions through Proof-of-Stake and Ethereum’s legacy Proof-of-Work model will be shelved permanently. To date, validators have already staked over 13 million ETH on the Beacon Chain. As the mainnet (the main network of the Ethereum blockchain) is merged with the Beacon Chain, the full transaction history of Ethereum, including every transaction, smart contract, and balance since July 2015, will also be merged.
Why is The Merge important?
The Merge is six years in the making and is considered by many to be a milestone in the history of cryptocurrency due to the potential material and philosophical implications. This milestone could also bolster market confidence and inject some much-needed optimism, after months of market volatility due to, among other factors, inflation and rising interest rates. As one commentator put it, Ethereum’s Merge “will prove that a decentralized and permissionless network can operate in an energy-efficient manner.” In addition, a merge like this is an incredibly rare event in crypto, and may never happen again.
How will The Merge impact me and my ETH?
The short answer is not much. The Merge is expected to be and should be seamless from a user’s perspective. Coinbase will briefly pause some deposits and withdrawals as a precautionary measure, specifically new Ethereum (ETH), ERC-20, Polygon (MATIC), Optimism (OP), PWETH, PUSDC, and PMATIC tokens, but we otherwise do not expect any other networks or currencies to be impacted. However, for those who staked their ETH, balances will not be unlocked nor will they be available to trade or transfer immediately after The Merge. Staked ETH is expected to be unlocked and accessible once the Ethereum protocol completes its upgrades. Current estimates on this upgrade completion is early 2023. Stay tuned!
The Terminal Total Difficulty (TTD) value triggering the Merge has been set at 58,750,000,000,000,000,000,000. This number, which will represent the cumulative difficulty of all mined Ethereum blocks, is expected to be reached somewhere between Sept. 13-16. Predictions right now are that it will happen around Sept. 15.
When the TTD number is reached, the network will merge its Execution layer with the new PoS Consensus layer, allowing the chain to continue on with a new system for issuing and authenticating blocks of transactions.
According to the Ethereum Foundation, a non-profit organization funding Ethereum ecosystem development, the Merge will cut the network’s energy usage by 99.95% and set the stage for further improvements to its core infrastructure.
At the point of the Merge, the difficulty level on Ethereum’s PoW network will increase to the point where mining new blocks will no longer be possible.
The Merge has been a long time coming, and the Beacon Chain was first introduced in December 2020.
Read the original article on Coinbase.