Ethereum is a decentralized blockchain platform that executes and verifies smart contracts. Participants can transact without a central authority via smart contracts.
Participants have full ownership and visibility of immutable, verifiable, and securely distributed transaction records.
Ethereum accounts send and receive transactions. Senders must sign transactions and pay Ether to process them on the network. Ethereum reports that the Merge upgrade was successful, and that there will be more.
The Merge is a significant step in reducing the amount of electricity used by the Ethereum blockchain, but there are still many improvements planned.
According to the Ethereum Foundation, the Paris upgrade's final phase was completed at 2:45 p.m. Hong Kong time, ending the long wait for the Ethereum network upgrade.
The second-largest blockchain in the world, with a market worth of US$200 billion, will undergo a significant change in its infrastructure known as The Merge, which will enable it to use less energy while potentially accelerating transaction times.
Speaking at a Merge event that was live-streamed by the Ethereum Foundation, co-founder Vitalik Buterin of Ethereum acknowledged the significance of the occasion but added that there is still much more to come.
He declared: "Let's go and build out all the other components of that ecosystem and make Ethereum into being what we want it to be. To me, the Merge just epitomizes the difference between early-stage Ethereum and the Ethereum we've always intended [it] to become.
Cryptocurrency Ether surged on Thursday to a high of US$1,648 before dropping 0.5% to US$1,611 just after the Merge news.
The second-largest token in the world by market capitalization had increased by roughly 50% over the previous three months prior to the Merge. However, more general macroeconomic worries, like American inflation and rising interest rates, had recently slowed the growth of the cryptocurrency sector.
The macro narrative that is dragging on risk assets makes this a very fascinating time for the Merge to take place, according to Justin d'Anethan, Institutional Sales Director at digital asset trader Amber Group, in an interview with Forkast. The Merge should be a very positive or exuberant time for cryptocurrency investors.
I'm still generally bullish on Ethereum, but I wouldn't try to estimate the timeline for the coming weeks or months because there are many unknowns, according to d'Anethan.
After the Merge, Ethereum switched from a proof-of-work consensus system to a proof-of-stake (PoS) consensus system (PoW).
According to the amount of Ether users have staked in the network, PoS requires users to validate transactions on the blockchain.
The world's most popular cryptocurrency, Bitcoin, uses the original PoW system, which involves validation by crypto miners employing energy-intensive computer farms.
The Ethereum Foundation estimates that switching to PoS will reduce the energy consumption of the network by 99.95%. According to Jonathan Victor, head of NFT and Web3 storage for open-source research and development company Protocol Labs, that's advantageous to Ethereum and the entire cryptocurrency industry as it comes under scrutiny amid a global push to decarbonize economies, he told Forkast in a written statement.
He added that this is a particular problem for non-fungible tokens (NFTs), the great majority of which are hosted on Ethereum, adding that most businesses are aiming for net zero by 2050, and with the Merge, ETH will go significantly closer to this goal. This migration will allay the worries of even the most outspoken [NFT] detractors.
D'Anethan urged investors and the larger crypto community to maintain their composure amidst the excitement and commotion around The Merge.
Investors need to be able to see through the hype and realize that this isn't the end goal, according to d'Anethan. "[It] paves the path for many upcoming improvements to Ethereum."
THE MERGE'S LONG HISTORY
2014: In the introduction ethereum white paper, Vitalik Buterin states that proof-of-work will probably need to give way to another mechanism in the future.
Ethereum is founded in 2015. Approximately 72 million ether coins were created in the first block. Of these ether, Buterin received 553,000.
To gauge public interest in proof-of-stake, Ethereum offers a beacon chain deposit contract in October 2020. When the merge was finished, if you staked 32 ether (ethereum promises), you would become a validator of ethereum transactions.
November 2020: The beacon chain reaches the minimum amount of staked ether that Ethereum determines is required for the chain to be regarded as a workable mechanism, or 524,288 ether.
December 2020: Seven days after reaching the staking threshold, the beacon chain is launched. The chain will now be coded and tested to see if it can support the entire volume of ethereum transactions.
In September 2022, the merger was successful.