The Ethereum Merge is expected to be completed on September 14-15, marking the formal transition to a proof-of-stake (PoS) blockchain. To make the switch, Ethereum would stop using its existing proof-of-work (PoW) chain, forcing miners off the network.
The change is important as it aims to cut down the blockchain's energy consumption - an issue that has been debated for a long time. Upon completion, minting an NFT will only take up as much energy as sending a mail, thus making it more eco-friendly.
But can the Ethereum team pull off the merge? Here’s what you need to know about the upcoming Ethereum Merge and its future impact on the NFT sector.
Table of Contents
#1 - What Is the Ethereum Merge?
#2 - Proof of Work vs. Proof of Stake
#4 - What Day is Ethereum Merge?
#5 - Can Vitalik and the Team Pull it Off?
#6 - Our Thoughts
What Is the Ethereum Merge?
For those unfamiliar, "The Merge" refers to Ethereum's switch from a proof-of-work consensus process to a proof-of-stake one.
The Ethereum Foundation provides a precise definition of this term.
“The Merge represents the joining of the existing execution layer of Ethereum (the mainnet we use today) with its new proof-of-stake consensus layer – the Beacon Chain.”
The Merge is meant to secure the network using staked ETH while simultaneously handling the energy-intensive mining operation. The change is expected to make Ethereum's network more secure, stable, and scalable.
Proof of Work vs. Proof of Stake
To understand the Merge, you must first get acquainted with how blockchains validate transactions.
There are several mechanisms for verifying transactions on blockchains. To ensure the integrity of the network, new transactions on Ethereum are validated by crypto miners in a "proof-of-work" mechanism.
Miners solve complicated mathematical puzzles using powerful computers to update the blockchain, creating new cryptocurrency tokens in the process. Blockchain records are made more secure in this way. However, the process consumes a lot of power.
In the "proof-of-stake" method, Ether owners will stake a certain percentage of their tokens (32 ETH) to verify new blocks on the blockchain. Instead of competing to win rewards, the blockchain randomly selects a validator to verify transactions and receive these rewards. The entire process uses less power.
Power Consumption Compared
Proof-of-Stake is significantly less energy-intensive, making it an eco-friendly option compared to the Proof-of-work. To understand this, let's put both mechanisms into perspective.
Bitcoin, the first PoW blockchain, is the most energy-intensive blockchain, using 11 times more electricity than Ethereum. To fully understand this, one Bitcoin transaction takes up enough energy a US household will consume for 50 days.
On Ethereum, minting an NFT takes up enough energy to power an average US household for 9 days. However, once Ethereum moves completely to PoS, minting an NFT will only take up as much energy as turning on a lightbulb.
What Day is Ethereum Merge?
Around Sept. 15, 2022. We used "around" because there's no hard date. Here's why.
When a new block is added to Ethereum's Proof-of-Effort network, miners are given a difficulty number to indicate how much work is required to add it. In place of a hard deadline, the Merge will occur when the total terminal difficulty of all Ethereum blocks mined reaches a predetermined threshold (TTD).
Core Ethereum developers decided on a TTD of 58,750,000,000,000,000,000,000 in August; this number will be achieved on or around September 14 or 15. We can only estimate because the number of blocks and their difficulty changes over time.
Can Vitalik and the Team Pull it Off?
The success of Ethereum's developers is widely anticipated to have far-reaching consequences for the blockchain. For one, it’ll make Ethereum more accessible to NFT creators and collectors while increasing transaction times and eliminating gas wars.
Naturally, there is little certainty regarding the transfer, which has been postponed many times. The developers only recently hit the start button this September, unsettling investors who began to think it would never see the light of day.
We can only wait until September 15th to see how the platform will fair. But if the Merge fails, it might jeopardize the value of the cryptocurrency and its booming NFT sector.
NotAnotherNFT is staying positive about the Merge, especially considering how it’ll impact how we interact with NFTs. For one, there’s been a long debate on how Ethereum NFTs have negatively affected the environment.
NFT trades and transactions are verified through mining (Proof-of-Work). Many people worry that dirty energy sources used in mining will increase carbon dioxide levels. However, once Ethereum moves to a proof-of-stake mechanism, it’ll reduce its energy consumption by 99.9%, thus eliminating its carbon footprint on the environment.
This will further lead to the mass adoption of NFTs on the Ethereum blockchain due to its potential scalability benefits. Plus, artists and collectors who had turned to other friendly alternatives due to environmental concerns may now consider Ethereum NFTs.
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