Ethereum is a decentralized blockchain platform with smart contract functionality, which verifies and executes transactions.
It has diverse applications varying from dApps, DeFi, NFTs, etc.
The merge, expected to happen on September 15th, is an upgrade of Ethereum’s blockchain, which will change the system of transaction processing, from Proof of Work (POW) to Proof of Stake (POS).
During the merge, data stored on the mainnet will be transferred to the “Beacon Chain”, this will become the main blockchain for Ethereum’s network. Those who staked a minimum of 32ETH (Validators) will be selected at random to confirm transactions on the blockchain.
Effects of the Merge and ETH 2.0
– Less energy consumption and carbon footprint: Proof of Stake consumes minimum electrical and computing power compared to Proof of Work, making Ethereum eco-friendly.
Companies and developers will be prompted to invest and interact with Ethereum’s blockchain, creating developmental opportunities and potential price inflation.
Gas fees are not directly influenced because its impacted by the number of transactions initiated and validated on the blockchain, independent of it using a Proof of Stake or Proof of work consensus mechanism.
ETH 2.0 will have a transaction processing speed of 100,000 transactions per second compared to ETH 1.0 with 15-45 transactions per second. This is achieved by a process called Sharding.
ETH 2.0 can be integrated with zero knowledge roll-ups or optimistic roll-ups, this bundles and compresses multiple transactions on the blockchain. This will allow the deployment of more smart Contracts.
In ETH 2.0 when new blocks have been forged, the rewards of that block are distributed to validators, there’s no minting (creation) of new Ethers. The Merge will provide Ethereum Blockchain more opportunities to develop and evolve as time progresses.
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