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    Gate.io Blog The Merge is 90% Complete
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    The Merge is 90% Complete

    05 August 16:43



    [TL; DR]


    The merge involves a transition from the proof-of-work consensus mechanism to proof-of-stake.

    The Beacon chain runs parallel to the ethereum network layer 1 (ETH1).

    There will be only be one test before the launch of the Merge

    The Merge will enable further upgrading of the ethereum blockchain.

    Key words: Beacon chain, Merge, Ropsten, Ethereum, proof-of-work, proof-of-stake


    The long –awaited ethereum merge is near its launch as many of the tests have been successful. The ethereum co-founder Vitalik Buterin said that the merge is 90% complete since there is only one testing to take place during August 2022. The development team believes that the Merge will be launched in 2022, most likely in September. By the way, the testing is conducted on Ropsten. In addition, Buterin said that there are five stages for the blockchain to attain its full capacity. During the annual Ethereum Conference Buterin said that the team is working on short-term and long term goals.



    What is the Merge?



    The Merge is the transition of Ethereum from the Proof-of-work to proof-stake consensus mechanism. This planned development has been on the cards since 2015. In order to facilitate this transition, Ethereum launched a parallel blockchain which uses the proof-of stake consensus mechanism called the Beacon Chain. However, currently the Beacon Chain does not process transaction but allow staking of ETH. On the other hand, the Ethereum mainnet continues to support all the transactions until the merge is successful. Notably, the 9th shadow fork, a part of the final testing, went live recently, bringing the Merge closer than ever before.




    Proof-of Stake vs. Proof of Work



    It is beyond doubt that proof-of-stake and proof-of-work are the two most common consensus mechanisms on the blockchain. Both bitcoin and ethereum (at the moment) use proof-of-work (PoW). With proof-of-work network validators use computing powers to solve complex mathematical equations to verify transactions on the blockchain. In return, the validators who solve these equations earn the related cryptocurrency. For example, the validators on ethereum network earn ETH while those on bitcoin chain get BTC. The major drawback of proof-of-work, also called mining, is the high consumption of energy during the validation process. This is one of the major reasons why ethereum needs to migrate to the proof-of-stake consensus mechanism.




    Source: Dittotrade


    On the contrary, with the proof-of-stake consensus mechanism the validators should stake the required amount of the native token. In the case of ethereum, once the Merge is complete, the validators will stake the required amount of ETH. Proof-of stake will increase the ethereum blockchain’s transaction efficiency.



    The Merging Process



    The blockchain we call Ethereum, also called execution layer or ETH1 will merge with Beacon Chain or ETH 2 which is the consensus layer. Nevertheless, once the merge is complete the Beacon Chain will process all transactions. This means that all the blocks will emanate from this layer. Once the merge is complete the Ethereum blockchain will shelve the Proof-of-work consensus permanently and leverage on the proof-of-stake consensus mechanism. Also, after the merge, the existing validators are free to withdraw their ETH currently locked in layer 1. For now, we are all waiting for the final testing of the Merge.




    The Testing Process



    The success of the 9th shadow fork means that the Merge is now in the final testing phase. Of the three testnets scheduled for this year, two of them have been completed implying that only one is outstanding, expected to come live in August this year. In fact, the Ethereum Foundation announced on 15 March 2022 that the merging testing was complete on Kiln. Before the Kiln there was the kintsugi merge testnet which led to the development of robust and stable protocols necessary for the merge. In general terms, the testing involves several aspects such as research and development.




    Source: Ethereumorg



    Research and development component



    Basically, the major research and development aspects of the Merge are complete. What is normally on-going in this regard is stress testing, a way of checking if the ethereum blockchain works effectively under different conditions.




    Testing the Testnet



    An ethereum testnet is a blockchain that has similar features and functions as the main version. However, the developers use it for testing and experimenting without the actual cryptocurrency. The developers will merge the various testnets with Ropsten, the main testnet.




    Unit testing



    This involves testing each separate unit or programme, checking how it functions before using it during the real upgrade.




    Integration testing



    This occurs when the team combines the different units or software modules of the Ethereum network to check the synergy.




    Fuzzing



    This testing should help the developers to identify any possible bugs before the system is upgraded.




    Benefits of Merge



    Scalability, securing, enhanced decentralization and improved efficiency are some of the benefits of the Merge.


    Another major benefit of merging is a reduction in energy consumption when validating transactions. With proof-of-stake there will be a sharp decrease in the quantity of new ETH created. It is estimated that new ETH will decrease from 4.3% to 0.43%, a whopping 90% decrease. Burning of ETH will make it a deflationary cryptocurrency.

    Other related benefits such as speed and network capacity will come with the introduction of shards in a future upgrade. As a fact, ethereum intends to introduce 64 shards.



    Source: Eduactiondistrict


    Also, there will be less dependence on specialized hardware such as output graphics cards. Apart from being very expensive, such hardware can create much dependence on external components.

    There is enhanced decentralization since anyone will be able to stake his/her ETH without requiring specialized equipment. Therefore, as more users will participate in staking the security of the blockchain will increase.



    Lower possibility of attacks



    It is highly unlikely that bad actors will launch attacks on the blockchain as the process is expensive. In addition, they can get huge penalties as well as being temporarily removed from the pool of stakers.




    Conclusion



    In summary, the ethereum merge testing is already 90% complete. The final testing is likely to take place in August before the developers launch the expected merge later this year. Through the merge, ethereum will shift from the proof-of-work consensus mechanism to the proof-of-stake. In basic terms, the merge involves integrating the layer 1 protocol with the Beacon chain. The expected benefits include increased decentralization, enhanced security and scalability. Further to this, the Merge creates room for other upgrades such as Surge in the future.








    Author: Mashell C., Gate.io Researcher


    This article represents only the views of the researcher and does not constitute any investment suggestions.

    Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.

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