With The Merge, Ethereum wants to get rid of an energy-intensive blockchain

With The Merge, Ethereum wants to get rid of an energy-intensive blockchain

For Ethereum, the merger (“the merge” 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. Decryption.

The Merge, or “la fusion” in good French, is a major 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 update. For good reason, Ethereum’s consensus mode will evolve from Proof of Work to Proof of Stake. Thus, instead of “proof of work”, a mechanism similar to that of Bitcoin which relies on miners to validate transactions, Ethereum will switch to “proof of stake” and will only need validators to ensure the functioning of the network.

“This is a highly anticipated step because it is the first time such a large and established network has changed consensus algorithms along the way. When Ethereum was launched, Proof of Work technology was the more proven, it was logical to go on it. But as early as 2016, the idea of ​​a change imposed itself in the community and some have been waiting for it since 2017, which also explains the very strong interest in this merger” remarks Claire Bavla, director of blockchains and cryptos at KPMG France.

A “merger” which will have the first consequence of drastically reducing the energy needs of the blockchain, as welcomed by associations such as Greenpeace which campaign for 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 put forward by the community is probably quite close to reality, given that miners will disappear from this protocol. Ethereum will still need a little 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 Whalemedia specialized in the Web3.

Advertising, your content continues below

Guillaume Henri, journalist in the IT section of Digital confirm: “Basically, we’re going to go from rigs [plateformes de minage, NDLR] which can consume several thousand watts to basic computers which consume just 30 watts. The only difference is that you will have to make sure you are always online so as not to risk losing your reward, so have a UPS in the event of a power cut”.

Towards a more centralized network?

Not to be eluded, either, is the need for validators to escrow 32 ethers in order to be able to participate in the validation of blocks. Which is no mean feat with ether over €1,500. It will therefore be necessary to commit nearly €50,000 to enter the system, where with the 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 expend more and more energy.For some experts, this is a problem since Ethereum will become more centralized.

Advertising, your content continues below

“The Merge generates several fears. That of technical bugs, first. Even if there are already more than 400,000 validators and Beacon is already running in parallel on the Proof of Stake, there is never certainty to 100% that everything will be fine. But the biggest fears relate to the governance of the network and its centralization. These are legitimate insofar as the large validators, those with a lot of liquidity, such as exchanges, could benefit from “a form of hegemony and that their self-regulation remains one of the questions. It’s a leap into the unknown to go to a technology that can offer a few players significant thresholds of domination”explains Claire Balva, who evokes fears linked to possible censorship of validators, which morally goes against the ideology of blockchains and is never well accepted.

Advertising, your content continues below

But then, what will become of the miners and all their equipment? Undeniably, some may give up and it is possible that stocks of graphics cards can be found on the second-hand market. However, not all miners will become useless.

“Miners who use graphics cards will be able to mine on other protocols (Ethereum Classic for example) where proof of work is still in operation [Ce sera aussi le cas de ceux équipés en ASIC, NDLR]. We can even see a future for them on Ethereum 2.0, because the metaverses that will be built on it will need graphic resources”completes Grégory Raymond who explains that “Ethereum should be seen more as a global computer on which we can develop decentralized applications. Its cryptocurrency, ether, can be seen as the fuel to use them”.

An orientation that The Merge should further enhance, by lifting the brakes on developers and investors who remained 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 to say before winter, in a context of uncertainty. and as the energy market explodes. Seen from here, this is a huge development opportunity for Ethereum against other cryptocurrencies.

“The Merge is timely, it is. Until now many large companies have refused to use Ethereum because of their commitments to sustainable development. In particular, this has provided a niche for competing protocols like Tezos, whose the main argument focused on respect for the environment, so this will no longer be valid and alternative blockchains will have to innovate on other characteristics” says the co-founder of The Big Whale.

“I have seen large companies being cautious about blockchain, because they have legal, social or cultural pressure to avoid technologies that are not sober from an ecological point of view. These locks will jump , because the very rich ecosystem of Ethereum will be reconciled with increasingly demanding environmental criteria” notes the KPMG crypto specialist.

“I also saw a lot of greenwashing from blockchains created without real 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 find other relays”she adds.

To stand out, the alternatives could notably focus on volume, processing capacity, as players such as Solana or Avalanche do, even if it will be difficult for them to compete with Ethereum with which they always seek to have an excellent connectivity. Environmental responsibility can no longer be their only argument.

Advertising, your content continues below

Advertising, your content continues below

Leave a Reply

Your email address will not be published.