Ethereum 'Merge

Ethereum transitioned to proof of stake shortly after the network reached “terminal total difficulty” early Thursday.

[some](https://ethereum.org/en/upgrades/merge/) have analogized to changing the engine of a rocket ship mid-flight. The transition is anticipated to be faster, more scalable, and Up until the moment of the merge, ETH was generated by “mining,” an energy-intensive process by which individuals directed huge amounts of computer power at difficult-to-solve puzzles.

Like Bitcoin, Ethereum had been approving new transactions on the blockchain with a consensus mechanism called proof of work, whereby “miners” race to solve ...

One popular miner has said he’ll “hard fork](https://gizmodo.com/ether-proof-of-stake-merge-crypto-mining-1849502453)” the network, splitting off the code to preserve a [separate chain](https://fortune.com/2022/09/13/ethereum-miners-fork-merge/) (as [ some did](https://www.sofi.com/learn/content/ethereum-classic-etc-vs-eth/) in 2016 to preserve a previous incarnation of Ethereum). [legal investigations](https://tax.thomsonreuters.com/news/sec-enforcement-director-cites-more-intentional-shift-in-articulating-crypto-analysis/), [plummeting token prices](https://time.com/nextadvisor/investing/cryptocurrency/are-we-in-crypto-winter/), and public exhaustion with [celebrity endorsements](https://www.nytimes.com/2022/05/17/business/media/crypto-gwyneth-paltrow-matt-damon-reese-witherspoon.html) and hype cycles. Buterin has claimed that the Merge makes Ethereum’s network [more secure](https://coinjournal.net/news/the-ethereum-network-will-be-more-secure-after-the-merge-says-vitalik-buterin/), but some experts have suggested that the [opposite](https://cointelegraph.com/news/ethereum-merge-makes-network-more-vulnerable-to-attack-security-expert) is the [case](https://zycrypto.com/ethereum-merge-could-open-the-network-to-attacks-from-bad-actors-says-security-experts/), cautioning users to watch out for “ [replay attacks](https://twitter.com/MakerDAO/status/1567953179333066753)” where scammers can record a transaction on Ethereum’s old chain and repeat it without permission on the new one. In July, Buterin said he’d consider Ethereum only [55% “done” after the Merge](https://fortune.com/2022/07/21/vitalik-buterin-ethereum-merge-ethcc-paris/). The minimum amount you can stake to become a validator is 32 ether (ETH), which is worth about $51,000 as of Wednesday afternoon, although individuals can join together in a [staking pool ](https://ethereum.org/en/staking/pools/)to meet the requirement. Although the mechanism was intended to promote decentralization, in practice individuals or groups with access to significant computer power [have](https://www.technologyreview.com/2022/04/21/1049391/miss-out-crypto-revolution/) dominated proof-of-work mining and [reaped those benefits](https://www.coindesk.com/business/2022/02/16/morgan-stanley-says-ethereum-less-decentralized-ether-more-volatile-compared-to-bitcoin/). That move isn’t likely to have a large impact on the ecosystem unless the big platforms recognize it; [OpenSea](https://cointelegraph.com/news/opensea-says-marketplace-won-t-support-forked-nfts-post-merge), the largest marketplace for NFTs, has [claimed](https://support.opensea.io/hc/en-us/articles/9402429763219-How-will-I-be-impacted-by-the-Ethereum-merge-) it will only support proof-of-stake Ethereum. As of 2:43 ET this morning, Ethereum now uses proof of stake, a way to approve new transactions that [promises](https://ethereum.org/en/upgrades/merge) to cut the blockchain’s energy requirements by 99.9% and usher in a new era for the second-largest cryptocurrency. [been key to Ethereum’s vision](https://www.technologyreview.com/2018/12/13/138651/ethereum-thinks-it-can-change-the-world-its-running-out-of-time-to-prove-it/). Proof of stake, on the other hand, requires “validators” to put up a stake—a cache of ether tokens in this case—for a chance to be chosen to approve transactions and earn a small reward. It has also posed [scaling challenges](https://www.coindesk.com/business/2022/02/16/morgan-stanley-says-ethereum-less-decentralized-ether-more-volatile-compared-to-bitcoin/) for Ethereum: network congestion drove up fees and slowed down processing rates, making the network too expensive for smaller transactions and hard to scale for larger ones. [race to solve hard math problems using huge amounts of computing power and are rewarded for their efforts in crypto](https://www.technologyreview.com/2022/03/04/1046636/ethereum-blockchain-proof-of-stake/).

The long-awaited upgrade to the Ethereum blockchain, home to the second largest cryptocurrency, finished very early Thursday. Anticipation for the software ...

The “staked” ether tokens act as collateral that can be destroyed or confiscated if the validators behave dishonestly.\n\nWill the Ethereum Merge increase the value of the cryptocurrency?\n\nEther's immediate price reaction was muted after the Merge, but analysts expect it could climb higher. Anticipation for the software update was so high that even had its own Google widget ticking down the remaining time.\n\nThe exact timing of "The Merge" was unknown but the update finished around 2:45 a.m. That should take away from supply, potentially supporting prices.\n\nRead More:\n\nCrypto Investors Step Up Bets Against Ether as 'Merge' Looms\nWhy Ethereum's 'Merge' Won't Solve All Its Problems\nFinal Countdown to the Ethereum Merge Begins

Ethereum has completed "the Merge," moving the network away from Proof-of-Work to a Proof-of-Stake consensus mechanism.

Besides ETH itself, there’s a broader question of whether Ethereum’s move to Proof-of-Stake will lead to an increase in public interest in the network. Despite the clear arguments for a bearish ETH and the broader crypto space today, the Merge is arguably the biggest catalyst for a rally that Ethereum has ever seen. central bank is committed to curbing inflation; he [reiterated in Jackson Hole](https://cryptobriefing.com/into-the-night-markets-tremble-as-powell-warns-of-pain-ahead/) last month that the Fed was targeting a 2% rate, which is still some way off today’s surging price rises. Consumer Price Index came in [higher than expected at 8.3%](https://cryptobriefing.com/us-inflation-eases/), and it still looked sluggish in the hours leading up to the Merge. [“sell the news” event](https://cryptobriefing.com/with-inflation-8-3-ethereum-risks-sell-the-news-merge/), likely because it generated huge hype and such scenarios are a common occurrence in crypto. Vitalik Buterin, meanwhile, confirmed in [a tweet](https://twitter.com/VitalikButerin/status/1559271315080679432) that he would consider censorship an attack on the network and advocate for slashing, a process where stakers lose their ETH as punishment for misbehaving or failing to validate transactions as required. [raised concerns](https://cryptobriefing.com/will-ethereum-be-vulnerable-to-censorship-after-the-merge/) about the network’s ability to evade censorship in light of the U.S. [hit a 2022 high](https://cryptobriefing.com/ethereum-bitcoin-ratio-hits-2022-high-merge-run-up/) against BTC, sparking Ethereum enthusiasts’ hopes of a possible “flippening” event in which Ethereum overtakes Bitcoin’s market capitalization (ETH holders have been [calling for](https://ratiogang.com/) the flippening for years now). [Bellatrix upgrade](https://cryptobriefing.com/ethereum-completes-bellatrix-final-pre-merge-update/) in which Ethereum prepared its consensus layer for the main event. The Proof-of-Work chain is expected to go live with an airdrop for ETH holders in the next 24 hours. “Proof-of-Stake has been a dream for the Ethereum ecosystem since pretty much the beginning,” said Buterin during the Ethereum Foundation’s viewing party. [a live streaming party](https://www.youtube.com/watch?v=Nx-jYgI0QVI); over 40,000 people tuned in to watch as the Merge shipped.