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After numerous delays and near-constant uncertainty, Ethereum The Merge has finally completed. The world’s second-largest cryptocurrency has switched to the proof-of-stake model, which reduces blockchain energy consumption by 99 percent. There could be some tough times ahead if the market comes to terms with such a big change, but this appears to be a win for nearly Everyone. Ethereum co-founder Vitalik Buterin reminded everyone that The Merge alone will reduce global energy consumption by 0.2 percent.
Ethereum started moving towards The Merge earlier this month when the “Bellatrix Upgrade” was introduced. The switch occurred as soon as the Terminal Total Difficulty (TTD) exceeded 58,750,000,000 T and the last block was found. That happened early on September 15th and triggered the move to proof-of-stake.
“Fusion will reduce global electricity consumption by 0.2%” – @drakefjustin
— vitalik.eth (@VitalikButerin) September 15, 2022
In proof-of-work models, miners perform increasingly complex calculations to verify transactions on the blockchain. For this, they are rewarded with a small amount of cryptocurrency. In the transition to proof-of-stake, miners become “minterns” who support the blockchain by storing Ethereum. The minting rate is determined by how much ETH a node has and how long it has had it. This approach is considered more sustainable as it doesn’t waste energy burning up graphics cards with endless hashes.
There’s another possible outcome: graphics cards might be easier to buy. While the recent crater in crypto prices has made buying GPUs a little easier, that could change if prices start to spike again. The move from cryptocurrencies like Ethereum to proof-of-stake eliminates the need to purchase rack after rack of GPUs.
Large mining rigs can contain dozens of GPUs and none of them are used to fail noobs.
However, not everyone is happy about the change – especially those who have spent millions of dollars buying mining hardware over the past few years. Some miners have announced their intention to “hard fork” the Ethereum blockchain. The EthereumPoW (ETHW) project contains a copy of all ETH-backed tokens, NFTs, DApps and liquidity pools, but will use the proof-of-work model going forward. It is uncertain whether this effort will be successful, but several exchanges and crypto companies are on board.
Ethereum’s price fell about 10 percent when The Merge went into effect, but it was stable throughout the day. With all these miners evicted, we could see them moving to other cryptocurrencies still using proof-of-work. So far, popular minable coins like Dogecoin and Bitcoin have been flat or down since The Merge.
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