The Merge, Ethereum's highly anticipated transition from a proof-of-work (PoW) verification mechanism to a proof-of-stake (PoS) system, has finally been carried out.
With the Merge, the Ethereum blockchain should have a better influence on the environment. That's because the PoS model is described as a consensus mechanism that uses at least 99% less energy than blockchains using the PoW system.
To learn more about this innovative event in the history of blockchain technology, let's clarify some of the biggest misconceptions about the Ethereum Merge.
No More Gas Fees
Some expected the Merge would lower or eliminate entirely the gas fees or the pricing value required to execute a transaction or contract on the Ethereum blockchain.
That's not the case, though, because the Merge is only the beginning of Ethereum's several planned upgrades. For example, one crucial upgrade expected to be implemented is sharding, a process that can cut transaction fees native to the Ethereum blockchain.
Sharding involves splitting the blockchain into separate chains or shards to reduce the overall network's computational load. All the shards collectively create one logical dataset. With sharding, the blockchain can ease the network congestion without building additional power-hungry crypto mining farms.
In addition, sharding can help the network process more transactions per second than before. That's because it does not need a validator to physically store the data of the transaction it is currently validating.
That may eventually result in machines that require less power to become validators on the network, which could help the Ethereum blockchain expand further.
Sharding may slash the gas fees for transactions on Ethereum layer-2 networks, although they may remain unchanged on the main network.
Instant Solution to the Blockchain's Environmental Woes
The Merge can't solve the blockchain's environmental concerns in a snap. While Ethereum's transition to a PoS system made its blockchain network more energy efficient, blockchains, like Bitcoin's, still use a PoW model and a significant amount of electricity.
A recent report from the White House stated that Bitcoin's contribution to the blockchain industry's global energy consumption was about 77%, while Ethereum's usage was between 20% and 39%.
Therefore, even with Ethereum considerably reducing its electricity usage, Bitcoin's continued implementation of PoW would keep weighing on the environment.
Still, the Ethereum Merge may start changing the view on non-fungible tokens (NFTs) as a potentially negative impact on the environment.
Faster Transactions
Blockchains using a PoS system usually operate faster than those using PoW. However, that's not exactly what the Merge is mainly intended to do.
While improvements have been made following the Merge, there are not huge or apparent, according to the statement on the Ethereum website. It also said users might not notice the 10% boost in the frequency of block production.
Instead of focusing on speed, the Merge was done to further strengthen the security of transactions on the network. Following the Merge, the blocks on Ethereum will be bundled into epochs that validators can vote on and verify within a certain period.
Once the validators confirm a transaction, it will be prepared for finalization in the next epoch.
