The Merge: Ethereum 2.0 Upgrade

Updated: Nov 22

This article will explore what The Merge means, ETH 2.0 release date, and the transition from Ethereum 1.0 to Ethereum 2.0.

 

Key Takeaways

  • The Merge is a proposed enhancement to the existing Ethereum network to merge several improvements and new features into the blockchain.

  • Ethereum envisions becoming energy-efficient through a proof-of-stake (PoS) consensus mechanism.

  • Ethereum 2.0 will increase energy efficiency and improve speed and network capacity.

  • The Merge will not affect ETH holders in the current Ethereum network or the gas fees.

  • Because ETH 2.0 will not need mining hardware, miners will be replaced by network validators that will use their Ether as collateral to process transactions.

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Introduction

According to recent reports, ETH 2.0 is almost complete and should be ready for launch in the coming months. The upgrade includes several improvements, including sharding, staking, and cross-chain interoperability.


Ethereum Merge is seen as a necessary step for the Ethereum network, as it will help improve scalability and enable new use cases. The launch of ETH 2.0 is eagerly awaited by the community and will likely increase network adoption and use.

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ETH 2.0 Merge

Ethereum's current Mainnet is expected to merge with the Beacon Chain, a necessary foundation for enabling a proof-of-stake (PoS) mechanism from the energy-intensive proof-of-work (PoW) consensus mechanism. The Beacon Chain is an independent chain with a PoS consensus layer. Hence, the rollout is dubbed The Merge.


The Merge is a proposed enhancement to the existing Ethereum network to merge several improvements and new features into the blockchain.

These include sharding, staking, and cross-chain interoperability.

  • The shard chains are still expected to be implemented after the merge.

  • The shards will ensure that Ethereum's capacity to handle transactions and store data grows, potentially obtaining more functions as developers roll out enhancements in multiple phases.

  • The usage of shard chains will not be introduced until 2023.

Ethereum's vision has always been to become energy-efficient by using a proof-of-stake (PoS) consensus mechanism. The goal of the upgrade is to improve scalability and enable new use cases for the Ethereum network.

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Advantages of the Merge

  • Improved speed and network capacity: Ethereum's shortcomings like scalability and transaction speed have led to the rise of blockchains like Solana, Avalanche, Polkadot, Cardano, etc., dubbing them Ethereum killers. The merger is expected to provide a more extensive network capacity and quicker transaction speeds, allowing Ethereum to regain its competitive advantage.

  • Increased energy efficiency: The transition is speculated to reduce Ethereum's carbon footprint and energy consumption since PoS will eliminate the computing power needed to execute arbitrary computations.

  • Network validators: Because ETH 2.0 will not need mining hardware, miners will be replaced by network validators that will use their Ether as collateral to process transactions.

  • Decentralization and coordination: The decentralization in Ethereum 2.0 brings more visibility to the network. The upgrade also emphasizes coordination efforts to help the Ethereum network progress to a larger stage.

  • Security: The merge comes with more robust security measures, like Testnet technology, that securely execute transactions at top speed. With the Testnet protocol, the upgrade will outshine any security breach and protect transactions.

  • Extra chain networks: Beacon and Shard chains, which operate parallel to the network, will be complement the security and management framework in the network.


ETH 2.0 Release Date

The Ethereum network is being improved gradually; each upgrade has a distinct release date. Before finally launching it, the Ethereum Foundation takes precautions to ensure that the network is as safe as possible from harmful attacks and the code is cleaned up. However, the testnet is now live, and billions of dollars worth of Ether tokens have already been staked.


Ethereum 2.0 upgrade has been in progress for years; the first release was scheduled to happen in November 2020. In December 2020, the testnet went live, but there is no timeline for when ETH 2.0 will be released. According to most recent reports, ETH 2.0 is almost complete, and the merger is expected to come out in Q2 2022.


Ethereum 2.0 Transition

Ethereum has gone through several upgrades in the form of hard forks since its inception. A whole new blockchain-based on proof-of-stake is being established with Ethereum 2 rather than a fork. This will initially operate alongside the legacy chain and be phased out over time.

Ethereum 2.0 transition will saliently feature:

  1. Sharding - Ethereum will be divided into 18 shards, each of which will operate in parallel. It will undoubtedly lead to increased productivity.

  2. Marking - The Ethereum network will transition to Proof-of-Stake Consensus, a considerably more energy-efficient approach for maintaining the system.

The Merge will not affect ETH holders in the current Ethereum network or the gas fees. The gas fees will directly be improved by sharding. ETH1, now the execution layer that handles transactions and executions, and ETH2, the consensus layer that validates PoS consensus, will be merged to become one – just Ethereum. The foundation avoids using ETH2 since it will attract a new set of problems. For instance, it will create an inclusivity problem as it will inaccurately represent Ethereum's roadmap.


Additionally, the term creates opportunities for scammers to exploit unwary users while also creating a confusing mental model for new Ethereum users. Hence, merging into only Ethereum brings staking clarity on a particular provider's stake.


Upgrade Necessary for Ethereum's future

Ethereum 2.0 is a necessary improvement for Ethereum's future. Users pay extremely high gas costs, have lengthy confirmation times, and are utilizing a high computing power throughout the procedure in its present condition. The rollout will enable Ethereum to retain its dominant position in the crypto space.