Ethereum completes 'merger' that will make its crypto transactions greener
Ethereum has completed its long-awaited "merger" into a much more energy-efficient method of creating new tokens, cryptocurrency co-founder Vitalik Buterin tweeted. Ether will no longer be hit with "proof of work" that uses powerful computers to solve cryptographic tasks. Instead, they will be created using "proof-of-stake" methods that require users called validators to stake tokens for the chance to approve transactions and earn a small reward.
Until today, Ethereum mining required powerful banks of computers to solve difficult mathematical problems. This not only consumed huge amounts of energy, but made Ethereum difficult to scale and expensive for small transactions. It has also concentrated power in the hands of a few, which is contrary to the decentralization philosophy of crypto.
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With the new system, the more a validator bets, the more likely they are to win a reward. But everyone gets at least something, because all staked ether earns interest (about 5.2%), which is more like buying a bond or banking it (outside of the wild market volatility, of course). The minimum stake amount required to be a validator is 32 ether (around $50,000 currently), although individuals can pool with trusted third-party validators to reach this level.
The merger takes its name from the fact that the Ethereum blockchain combined with a parallel network that has now been running for almost two years in a proof-of-stake test, but it is only one step in the transformation . "We still have to evolve, we have to settle the privacy. For me, the merger symbolizes the difference between an early-stage Ethereum and the Ethereum we've always wanted," Buterin said during a live-streamed Merge Party. .
Ether started the day higher, but has since fallen a few percent from yesterday. Whether the merger will deliver on its promise to transform crypto remains to be seen, as there are still many questions surrounding regulation, Ethereum forks and more. There is also the risk of scams (as usual in crypto), with the risk of transactions from the old chain being copied to the new one, among other things.
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Ethereum has completed its long-awaited "merger" into a much more energy-efficient method of creating new tokens, cryptocurrency co-founder Vitalik Buterin tweeted. Ether will no longer be hit with "proof of work" that uses powerful computers to solve cryptographic tasks. Instead, they will be created using "proof-of-stake" methods that require users called validators to stake tokens for the chance to approve transactions and earn a small reward.
Until today, Ethereum mining required powerful banks of computers to solve difficult mathematical problems. This not only consumed huge amounts of energy, but made Ethereum difficult to scale and expensive for small transactions. It has also concentrated power in the hands of a few, which is contrary to the decentralization philosophy of crypto.
I
This content is not available due to your privacy preferences. Update your settings here, then reload the page to see it.
With the new system, the more a validator bets, the more likely they are to win a reward. But everyone gets at least something, because all staked ether earns interest (about 5.2%), which is more like buying a bond or banking it (outside of the wild market volatility, of course). The minimum stake amount required to be a validator is 32 ether (around $50,000 currently), although individuals can pool with trusted third-party validators to reach this level.
The merger takes its name from the fact that the Ethereum blockchain combined with a parallel network that has now been running for almost two years in a proof-of-stake test, but it is only one step in the transformation . "We still have to evolve, we have to settle the privacy. For me, the merger symbolizes the difference between an early-stage Ethereum and the Ethereum we've always wanted," Buterin said during a live-streamed Merge Party. .
Ether started the day higher, but has since fallen a few percent from yesterday. Whether the merger will deliver on its promise to transform crypto remains to be seen, as there are still many questions surrounding regulation, Ethereum forks and more. There is also the risk of scams (as usual in crypto), with the risk of transactions from the old chain being copied to the new one, among other things.
All products recommended by Engadget are selected by our editorial team, independent of our parent company. Some of our stories include affiliate links. If you purchase something through one of these links, we may earn an affiliate commission. All prices correct at time of publication.
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