For Ethereum, the merger (“the fusion” in English) is imminent. This blockchain will abandon mining and thus drastically reduce its energy consumption, creating development opportunities in line with the environmental challenges of our time. Cracked.
The Merge, or “the fusion” in good French, is a big step for the Ethereum blockchain and the world of cryptocurrencies, since the general public knows it mainly for ether. This move to ETH 2.0, eagerly awaited by the cryptosphere, hides more than a simple upgrade. For good reason, Ethereum’s consensus mode will evolve from Proof-of-Work to Proof-of-Stake. Thus, instead of “proof of work”, a Bitcoin-like mechanism that relies on miners to validate transactions, Ethereum will switch to “proof of stake” and only need validators to ensure the network works.
“This is a long-awaited milestone because it’s the first time such a large and established network has changed consensus algorithms along the way. When Ethereum launched, proof-of-work technology was the most proven, it made sense to continue. But already in 2016 the idea of a change in the community was imposed and some have been waiting for it since 2017, which also explains the very strong interest in this merger” comments Claire Bavla, Head of Blockchains and Crypto at KPMG France.
A “merger” that will have as its first consequence the drastic reduction of the energy needs of the block chain, as well welcomed by associations such as Greenpeace that advocate a change of model towards Proof of Stake. With a wave of a magic wand, so to speak, Ethereum will consume 99% less energy.
It sounds too good to be true, and yet the number is realistic. “This figure that the community is proposing is probably pretty close to reality, given that miners will disappear from this protocol. Ethereum will still need a bit of power to operate, but validators will only need a rudimentary computer. A Raspberry Pi with 2TB of disk space can do the job, which is like running a small home server.”explains Grégory Raymond, co-founder and editor-in-chief of the big whalespecialized media on the Web3.
Guillaume Henri, journalist for the IT section of Digital confirm: “Basically, we are going to go from platforms [plateformes de minage, NDLR] that can consume several thousand watts compared to basic computers that consume only 30 watts. The only difference is that you’ll have to make sure you’re always online so you don’t risk losing your reward, so have a UPS in case of a power outage.”.
Towards a more centralized network?
There is also no getting around the need for validators to deposit 32 ethers in order to participate in block validation. Which is no small thing with ether for more than €1,500. Therefore, it will be necessary to commit almost €50,000 to enter the system, where with Proof of Work, any machine could potentially participate (even if to have a chance of receiving a reward, it became necessary to commit more and more computing power : and therefore spend more and more energy For some experts, this is a problem as Ethereum will become more centralized.
“The Merge raises several fears. The one of technical errors, first. Even if there are already more than 400,000 validators and Beacon is already running in parallel on Proof of Stake, there is never a 100% certainty that everything will be fine. But the biggest fears are related to the governance of the network and its centralization, these are legitimate insofar as the big validators, those with a lot of liquidity, such as exchanges, could benefit from “a form of hegemony and that their self-regulation continues being one of the questions. It’s a leap into the unknown to go to a technology that can offer some players significant thresholds of dominance.”explains Claire Balva, who evokes fears linked to a possible censorship of validators, which morally goes against the ideology of blockchains and is never well accepted.
But then, what will become of the miners and all their equipment? It is undeniable that some may give up and it is possible that stock graphics cards can be found on the second hand market. However, not all miners will become useless.
“Miners using graphics cards will be able to mine on other protocols (Ethereum Classic, for example) where proof of work is still running [Ce sera aussi le cas de ceux équipés en ASIC, NDLR]. We can even see a future for them in Ethereum 2.0, because the metaverses that will be built will need graphics resources.”completes Grégory Raymond who explains that “Ethereum should be seen more as a global computer that we can build decentralized applications on. Its cryptocurrency, ether, can be seen as the fuel to use them”.
An orientation that The Merge should further enhance, taking the brakes off the developers and investors who remained as spectators to respect their ethical and ecological commitments.
A merger that comes at the best time and creates new opportunities
Ethereum has been working on this change for several years, and the least we can say is that it comes at the right time, that is, before winter, in a context of uncertainty and an explosion in the energy market. Seen from here, this is a great development opportunity for Ethereum against other cryptocurrencies.
“The merger is timely, it is. Until now, many large companies have refused to use Ethereum due to their commitments to sustainable development. In particular, this has provided a niche for competing protocols such as Tezos, whose main argument focused on respect for the environment, so this will no longer be valid and alternative blockchains will have to innovate other features” says the co-founder of the big whale.
“I have seen large companies being wary of blockchain, because they have legal, social or cultural pressure to avoid technologies that are not ecologically sober. These locks will jump, because the very rich ecosystem of Ethereum will be reconciled with environmental criteria more and more demanding” notes KPMG’s crypto specialist.
“I also saw many green wash of blockchains created without true green will, but who saw that the green argument worked very well with large accounts, sometimes with very surprising marketing speeches. From now on, they will have to look for other replacements.”she adds.
To be highlighted, the alternatives could focus notably on volume, processing capacity, as players like Solana or Avalanche do, although it will be difficult for them to compete with Ethereum with which they always seek to have excellent connectivity. Environmental responsibility can no longer be your only argument.
#Merge #Ethereum #rid #energyintensive #blockchain