“The Merge”: successful transition for the Ethereum blockchain

“The Merge”: successful transition for the Ethereum blockchain

“And we are done! » Vitalik Buterin did not hide his satisfaction, Thursday, September 15. The co-founder of the “block chain” (blockchain) Ethereum welcomed, on the social network Twitter, a particularly important technical change that its platform has just made, supposedly to make it more efficient and with less energy consumption. “All those who contributed to making the Fusion a success [“la Fusion”] you can feel very proud today”he added.

Dubbed “The Merge,” this major technical change involves changing how trades are validated on the Ethereum blockchain, a massive tamper-proof computer ledger that serves as the foundation for billions of dollars worth of trades. The community behind this blockchain, led by Vitalik Buterin, has decided to move towards a system considered less energy consuming: a protocol based on “proof of work” (work test), Ethereum has switched to another protocol based on “proof of stake” (proof of stake).

Read our explanations: What is Ethereum’s transition from “proof of work” to “proof of stake”?

“No one has triggered an alert”

There is a lot at stake for the sector. It is true that ether, the cryptocurrency backed by Ethereum, represents only about 20% of the total value of existing virtual currencies, which is half the value of bitcoin (40%), the most widely used cryptocurrency in the world. But Ethereum has a much broader field of applications than its competitor, since it serves as a support for multiple uses, such as the production of NFTs (non-fungible token, digital certificates), games and applications. Therefore, making such a technical transition when many services are based on this blockchain was risky: the operation has often been compared to replacing an aircraft engine in mid-flight.

Also read: Crypto Art: Over $100M worth of NFTs Stolen in One Year

One after another, the world’s leading cryptocurrency exchanges: BinanceCoinbase, Bitfinex, bitpanda… – which had suspended Ethereum-based exchanges during the transition, announced that it would resume operations, a sign of its confidence. The price of ether also remained stable at noon, slightly falling to around 1,595 euros for 1 ether.

“A priori everything went well, no one fired an alert” in the small world of cryptocurrencies, which communicates in real time on social networks, Manuel Valente, from the French platform Coinhouse, explained to Agence France-Presse (AFP). “Decentralized Finance Applications”that allow to borrow and lend cryptocurrencies and that are the spearhead of Ethereum, “working properly”he added.

What future for the “minor”?

One of the points to watch, however, in the coming weeks is the attitude of former Ethereum “miners”, whose task until now consisted of validating transactions by solving very complex calculations, which required powerful computers. With the Proof-of-Stake protocol, transaction validation no longer requires performing calculations (called “the work”), but rather proving that one owns a portion of the cryptocurrency in question (“the stake”). All those expensive machines miners have invested in over the years are now useless.

A small minority of them, opposed to the move from Ethereum, decided to continue working as before. Therefore, two different validation systems now operate in parallel, resulting in a forka branch, as it is called in the jargon of the world of crypto assets: the great registry that collects all the transactions of the Ethereum block chain is duplicated.

This kind of schism It has already happened in the world of cryptocurrencies. If it continues, such duplication would not call into question the overall credibility of the new Ethereum, but it could still cause a number of technical issues, confuse ether holders, and create risks of attacks or embezzlement.

Also read: At Crypto Policy Symposium, Crypto-Economics Skeptics Go into Resistance

The world with AFP

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