Cryptocurrency platform Ethereum has completed a long-awaited software upgrade.
The upgrade – known as the Merge – has shifted the crypto platform into a more environmentally sustainable framework by reducing Ethereum’s energy consumption. It will also set the stage for future improvements that will make the platform easier and cheaper to use.
The technical details of the Merge are extremely complex, but, basically, the process boils down to a shift in how cryptocurrency transactions are verified.
After completing the Merge, Ethereum has now shifted from a verification system called proof of work (PoW) to “proof-of-stake” (PoS) – which consumes less energy and does not involve an energy-guzzling computational race, unlike its previous system. PoS also deposits or “stakes” a certain amount of participants’ crypto savings in a pool, which additionally enters them into a lottery. The new system also has a reward system; every time a crypto transaction requires approval, a winner is selected to verify the exchange and receive a reward.
Popular estimates show that Ethereum’s shift to proof of stake will reduce its energy consumption by more than 99%.
The developers involved in the Merge have said that the switch from PoW to PoS will make it easier and friendlier to design future updates that lower gas fees – the costs of executing a transaction in cryptocurrency associated with the Ethereum platform, Ether.
Ethereum is potentially the most important platform in the crypto industry. The platform’s layer of software infrastructure forms the basis of thousands of applications handling more than $50 billion in customer funds.
So far, the successful upgrade of Ethereum has become the major positive highlight of the crypto industry this year after witnessing a devastating market crash that drained nearly $1 trillion from the industry. Many prominent crypto companies were forced into bankruptcy due to the crash.
The upgrade was being looked at with a close eye as any glitches could complicate the transition. A single flaw in the Merge could have potentially disrupted the broader crypto industry, especially companies using the crypto platform’s software infrastructure. the worst-case scenario could have upended start-ups and sent the market into another major tailspin.
For precautionary measure, cryptocurrency exchange Coinbase paused certain Ethereum deposits and withdrawals during the Merge.
“And we finalized! Happy merge all. This is a big moment for the Ethereum ecosystem. Everyone who helped make the merge happen should feel very proud today,” Ethereum founder Vitalik Buterin tweeted.
The completion of the Merge has come after years of intense study and debate. Founded in 2013 by Vitalik Buterin, Ethereum is now run by a loose network of coders from around the world who spent months gathering on video calls streamed on YouTube to discuss the intricacies of the Merge.
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