Lower costs, higher speeds after Ethereum merger? Don't count on it

There is a lot of hype surrounding the Ethereum merger. But in reality, most users won't notice much of a change.

As we approach the date of the Ethereum merger, users have been speculating about what it will mean for projects and the wider ecosystem. Some say the merger will have little impact on fuel costs and think transaction speeds could improve.

However, in general, most ordinary users won't notice much of a change. The real changes for average users will not be visible until the partitioning mechanism is introduced six months later.

The merge is a scheduled update to the Ethereum network scheduled for September 15th. It will move transaction validation from proof-of-work (PoW) to proof-of-stake (PoS). PoS has been part of Ethereum's plans for many years, but the level of technical sophistication it requires has been slow to develop. This means a transition from miners responsible for validating blocks to ETH staked owners.

Related: How shard-based blockchains could handle more transactions than Visa

This will have several important long-term consequences. First, it will mean a huge reduction in the amount of electricity Ethereum uses (up to 99.9%). Although PoW is a very efficient means of validation, it has been shown to use the same amounts of electricity as entire countries, which means it is very detrimental to the environment.

Under PoS, validators will only have to stake 32 Ether (ETH). The change will also mean an increase in security. In effect, this reduces the danger of an attack by 51% (needed to take control of the network), which is more likely on a PoW system. On a PoS system, the risk of launching an attack is the staked ETH - as opposed to the cost of electricity on PoW - so...