Ethereum Merge

Ethereum, the second-largest blockchain behind bitcoin, is expected to begin a technical upgrade dubbed the "merge." Here are four things investors should ...

"The merge will definitely make Ethereum more secure," says Gorbunov. Due to that barrier, Gorbunov expects Ethereum to become a lot safer. [Ether](https://www.cnbc.com/quotes/ETH.CM=) is valued at about $1,600 per coin as of Sept. And as the supply of ether decreases, the value of individual coins could increase, which would be welcome news for investors. However, this model is expected to be much less energy intensive. Both are algorithms used to allow users to add new cryptocurrency transactions and keep a record of them on a blockchain network.

Michael Blau and Mason Hall of a16z whipped up the dynamic NFT and its smart contract in just a few days before the Ethereum Merge.

The merge will fully transition the Ethereum blockchain’s mainnet from proof-of-work mining to a proof-of-stake system—a massive shift which is predicted to reduce Ethereum’s energy consumption by 99.95%. “And so we use[d] a 12-hour window before the merge actually happens to represent this intermediate phase.” “The only way to detect if the merge happened on chain or not is to measure something called block.difficulty,” Hall said. The design features a similar black-and-white ASCII style to Blau’s previous Ethereum NFT collections, The second phase of the [NFT](https://decrypt.co/resources/non-fungible-tokens-nfts-explained-guide-learn-blockchain), which occurred early Wednesday, shows two half-merged circles. [merge](https://decrypt.co/resources/what-merge-ethereum-move-proof-stake) and shows two separate circles. The NFTs—unique blockchain tokens which signify ownership—are non-transferable. The two bears then combine to make the ultimate Ethereum panda bear, which has become a metaphor for post-merge Ethereum. Software developer [Zachm.eth](https://twitter.com/zachmeyer_) designed the front end for the project. [crypto wallet](https://decrypt.co/resources/wallets) addresses have already [minted](https://decrypt.co/resources/beginners-guide-to-nfts-how-to-mint-a-non-fungible-token-on-ethereum) a free “Proof of Merge” NFT, which are unlimited in number but can only be claimed before the merge is finalized. [ASCII image](https://en.wikipedia.org/wiki/ASCII_art) on chain, and the more phases we wanted to store, that’s more data we have to store, which is more storage [gas fees](https://decrypt.co/resources/inside-ethereum) that we’d have to pay when actually deploying the smart contract initially,” Blau said. [Web3](https://decrypt.co/resources/what-is-web-3) firm [Andreessen Horowitz](https://decrypt.co/101321/andreessen-horowitz-announces-new-4-5-billion-crypto-fund) have created a [Proof of Merge](https://www.proofofmerge.xyz/) NFT featuring metadata that dynamically evolves as the Ethereum merge unfolds.

The Merge will see the second biggest blockchain, ethereum, adopt a proof-of-stake model. It's estimated to reduce the blockchain's energy use by over 99%.

Critics of ethereum -- typically bitcoin enthusiasts -- compare the merge to changing the engine of an airplane in the middle of a passenger flight. "There are a lot of tech companies that have openly said, 'we are not going to do anything until after the Merge.'" Whereas a bad actor needs 51% of a network's power to overrun a proof-of-work system, they'd need 51% of the total staked ether to overrun the proof-of-stake system. Charbonneau reckons it could be safer because of a function called "slashing" – in essence, validators can have their staked ether burned, and their network access revoked, if they're found to have acted maliciously. In the run-up to the Merge, ethereum developers have been stress testing the new blockchain by running data and transactions through it on various ethereum testnets. "From speaking to ethereum developers, they've felt confident that had proof-of-work mining been, say, banned overnight, they could do the Merge even months ago and it would work," Charbonneau said. The network is made up of hundreds of thousands of computers around the world, meaning bad guys would need to control 51% of the power in this vast mining pool. Other times, as in the case of a proof-of-stake blockchain, staked cryptocurrency helps secure a protocol. The cute metaphor beguiles the importance of the Ethereum Merge to everyone, not just cryptocurrency supporters. The Ethereum Merge is scheduled to occur around 11 p.m. For proof-of-work blockchains, that resource is power – in the form of the electricity required to run a mining operation. It takes a powerful computer to have a chance in this race, and people typically set up warehouses full of rigs for this purpose.

64% of staked ether currently resides with five entities, according to data firm Nansen — and an expected ramp-up by centralized exchanges raises the risks ...

Greg Abbott (R) in sending migrants to Ron DeSantis (R) sent two planes of undocumented migrants to Martha's Vineyard in Massachusetts on Wednesday, joining Texas Gov. Here's the amount of ether staked on each platform over that time: And it's worth noting that Lido has already proposed a And centralized exchanges are poised to ramp up ether staking following the Merge as their customers look to collect yield on coins — a trend that raises the specter of censorship. [according to Nansen](https://research.nansen.ai/article/174).

As the merge transition happens, the following 12 minutes are "the most critical,” Ethereum developer Marius van der Wijden told Fortune.

“So it’s okay if things are a little messy so long as we wind up with a finalized merge without too much delay.” There might be a few forks that may “delay finalization by a bit, and that’s not a big deal.” For one, they’ll want to see blocks proposed with transactions on the proof-of-stake chain. That’s not necessarily a big problem,” Sutton tweeted. In turn, they’d also look for a high participation rate from validators. Mining difficulty is important in this case, as it keeps block times

Ethereum is changing: moving from proof of work to proof of stake. But what does this mean to ordinary users? Here's what you need to know.

The move to proof of stake will add deflationary pressure to the cryptocurrency. Over time, it is possible that more ETH is burned than is issued on a yearly basis, but the merge alone will not make this happen. This combined with a drop in the issuance rate will add deflationary pressure to the cryptocurrency—but it won’t automatically make it deflationary. With proof of work, the total amount of miners are rewarded ~13,000 Ethereum per day. “You are giving your stake to someone else, who may decide to attack with that stake,” he said. Validators can be anyone with at least 32 ETH available to “stake,” or pledge, to the network. “ It is doable by anyone with a sufficiently good computer, electricity, and internet,” he said. “It hurts the network rather than helping, and the return on investment at the moment probably isn't worth it.” Right now, the cryptocurrency’s network uses the same consensus network as [Bitcoin](/resources/what-is-bitcoin-four-minute-instant-guide-explainer): proof of work. But this isn’t true—at least not yet, anyway, according to the Ethereum Foundation and experts who spoke to Decrypt. The long-awaited upgrade to the second biggest cryptocurrency by market cap is expected to take place tonight, based on [current estimates](https://ultrasound.money/). [proof of stake](https://decrypt.co/resources/proof-of-work-vs-proof-of-stake).

The historic upgrade casts aside the miners who had previously driven the blockchain, with promises of massive environmental benefits.

CoinDesk is an independent operating subsidiary of [Digital Currency Group](https://dcg.co/), which invests in [cryptocurrencies](https://dcg.co/#digital-assets-portfolio) and blockchain [startups](https://dcg.co/portfolio/). “Now the market is roughly 70/30 in favor of this being a positive event for ETH.” [replaced by new ones](https://www.coindesk.com/layer2/2022/04/20/is-ethereum-staking-pool-lidos-growth-an-omen-of-centralization/). In general, it is impossible to predict with certainty how the markets will react to a successful Merge. In crypto markets, the Merge had become an object of speculation since at least mid-July, with traders initially viewing the event as a catalyst for a steep rally in the price of ETH. After around 15 long minutes, the Merge officially [finalized](https://www.coindesk.com/tech/2022/09/14/monitoring-the-merge-what-a-successful-ethereum-upgrade-will-look-like/), meaning it could be declared a success. “Proof-of-work is a mechanism by which you take physical resources and you convert them into security for the network. Edgington pointed to the environmental impact of the Merge upgrade as the benefit he is personally the most excited about. “I like to think of it as kind of like the switch from gasoline to electric.” “I mean, it's kind of hard to defend ‘stickers for grownups’ that emit, by some estimates, a megaton of [carbon dioxide] a week.” From an energy costs perspective, it's like Finland suddenly shut off its power grid, according to [one estimate](https://digiconomist.net/ethereum-energy-consumption). “The metaphor that I use is this idea of switching out an engine from a running car,” said Justin Drake, a researcher at the non-profit Ethereum Foundation who spoke to CoinDesk before the Merge happened.

Ethereum's transition from Proof of Work to Proof of Stake was successfully completed just after 2:30 AM ET, or 5:30 AM GMT at block 15537391.

CoinDesk is an independent operating subsidiary of [Digital Currency Group](https://dcg.co/), which invests in [cryptocurrencies](https://dcg.co/#digital-assets-portfolio) and blockchain [startups](https://dcg.co/portfolio/). [strict set of editorial policies](/ethics/). [According to EtherNodes](https://www.ethernodes.org/merge), 88% of ether nodes were Merge ready and synched in the moments leading up to the event. [quoted on the Bankless podcast as saying](https://www.benzinga.com/markets/cryptocurrency/22/07/28238848/vitalik-buterin-the-merge-isnt-priced-in-yet)“not going to be priced in pretty much until after it happens” traders appeared to disagree. - Steep exchange inflow is usually a sign of traders preparing to sell, however, there isn’t a consensus yet. “But the fundamentals couldn’t be stronger.”

Ethereum, the most popular cryptocurrency platform, completed its much-anticipated switch to a more energy-efficient infrastructure.

That new chain, the Beacon Chain, was unveiled in December. A flaw in the Merge could imperil the broader crypto industry, upending start-ups and sending the market into a tailspin. The system is widely known as “mining” because the computers earn payments in cryptocurrency as rewards for the verification service. The process of shifting Ethereum to proof of stake required years of intense study and debate. The upgrade is expected to reduce Ethereum’s energy consumption and set the stage for future improvements that will make the platform easier and cheaper to use. It was a rare moment of joy in a grim year for crypto that saw a devastating market crash drain nearly $1 trillion from the industry, forcing some prominent crypto companies into bankruptcy.

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.

The upgrade, known in the industry as the “Merge”, which changes how new transactions are verified on the Ethereum blockchain, completed early Thursday, co- ...

[Purchase a Print subscription for 11,12 € per week You will be billed 107,91 € per month after the trial ends](https://subs.ft.com/spa3_uk3m?segmentId=461cfe95-f454-6e0b-9f7b-0800950bef25&utm_us=JJIBAX&utm_eu=WWIBEAX&utm_ca=JJIBAZ&utm_as=FIBAZ&ft-content-uuid=4d3c85ee-c812-47b2-a973-acaf1c141a50) [Purchase a Digital subscription for 6,64 € per week You will be billed 39 € per month after the trial ends](https://subs.ft.com/spa3_digital?ft-content-uuid=4d3c85ee-c812-47b2-a973-acaf1c141a50) [Purchase a Trial subscription for 1 € for 4 weeks You will be billed 65 € per month after the trial ends](/signup?offerId=41218b9e-c8ae-c934-43ad-71b13fcb4465&ft-content-uuid=4d3c85ee-c812-47b2-a973-acaf1c141a50)

The blockchain network completed the crypto world's biggest and most ambitious software upgrade to date, according to its co-founder Vitalik Buterin in a ...

Ethereum, the world's second most valuable cryptocurrency, has completed a massive software upgrade that its backers claim will slash its carbon footprint.

The merger moves ethereum to a mechanism called “proof-of-stake,” which is much more energy efficient. The world’s most valuable cryptocurrency, bitcoin, was down almost 1%, trading at $20,174, according to CoinDesk. blockchain called the Beacon Chain,” it added.

The decrease in energy consumption takes one criticism of NFTs off the table, which in turn could see Ethereum once again become the most used blockchain for ...

There are still fights ahead for NFTs, including looking at decoupling non-fungible tokens from the vagaries of market forces and for projects to break away from a focus on digital art – read my feature on Case in point, the first NFT created on the post-merge Ethereum is below. OpenSea is the largest NFT marketplace around and has also stated that post-merge it will now only support proof-of-stake NFTs, so your guaranteed all non-fungible tokens from now on are low-cost energy. What the Ethereum merge doesn't mean is cheaper gas fees – the cost you're charged to register an NFT on the blockchain. So what is the merge and why does it matter that Ethereum has changed from proof-of-work to proof-of-stake? The Ethereum merge has finally happened and it could be the single biggest change to how we create and use NFTs, ever.

At 6:42 A.M. Coordinated Universal Time (2:42 A.M. EDT), the Ethereum blockchain merged with a special-purpose decentralized ledger called the Beacon Chain, ...

The exact time is [yet to be announced.](https://twitter.com/EthereumPoW/status/1570323388358602752) [tweeted](https://twitter.com/EthereumPoW/status/1569428021437935617) on Sept. Miners are being replaced with validators, who pledge, or stake, ether tokens as collateral to verify transactions and accrue interest on the staked assets as a reward. Ethereum underpins the vast majority of Web3 applications such as decentralized finance protocols and non-fungible tokens (NFTs), as well as ether, the second-largest cryptocurrency with a $195 billion market value. The approach has drawn widespread criticism from crypto-skeptics and environmentalists because of its immense energy usage—Ethereum’s carbon footprint Since its inception, Ethereum has been based on the proof-of-work system for running a blockchain.

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/).

Popular cryptocurrency blockchain Ethereum has completed its long-awaited switch to proof-of-stake. That upgrade process, better known as 'The Merge', ...

Click here to find out more about our partners. Find out more about how we use your information in our Privacy Policy and Cookie Policy. You can select 'Manage settings' for more information and to manage your choices.

Ethereum's core developers already have their eyes set on the network's next upgrade, Shanghai. What it will consist of, however, is up for debate.

[rolling collections of transactions into a unit](https://decrypt.co/resources/what-are-ethereum-rollups-scaling-solution-cut-transaction-costs) that is presented to the Ethereum blockchain as a single transaction. Van Der Wijden is confident though that the upgrade will occur within the next year. “Some of the more research-focused people don't really consider that all of this has to be implemented and tested,” said Van Der Wijden. There have been no updates made to the EVM in over two years, in part because incorporating those improvements into the merge would have created a massive headache for developers. Staking ETH will allow these entities to generate and collect new ETH as a reward for proving the computing power necessary to validate transactions and secure the network. And once again, the decision will have multi-billion dollar implications.

Two major news events could rock the crypto market this month. Here's what experts think, and why it matters for crypto investors.

[ethereum](https://time.com/nextadvisor/investing/cryptocurrency/price/ethereum-eth/) [merge](https://time.com/nextadvisor/investing/cryptocurrency/ethereum-merge-price-this-week/) took place on Thursday, completing one of the largest events in crypto to date. One thing’s for sure: If the last couple years have taught us anything, it’s that crypto prices are highly volatile and difficult to predict. “We believe bitcoin should ultimately be used as a proxy for direction in the broader crypto market,” Kruger said. The market is particularly volatile right now, as inflation numbers send crypto and stock prices tumbling ahead of another likely rate increase next week at the Fed meeting. [saw similar tumbling](https://time.com/nextadvisor/investing/latest-stock-market-news/) following the CPI release, and the crypto market has increasingly tracked the stock market in recent months. “Given how things have been correlating, and considering this latest inflation data, we expect more downside pressure in crypto as investors are forced to contend with the reality of higher for longer monetary policy that strains growth prospects and weighs on sentiment. The Fed is essentially attempting to cool down the economy in order to rein in rising prices. “There’s no doubt the CPI report has triggered a fallout in risk assets and crypto markets by extension,” said Joel Kruger, Market Strategist at LMAX Group, a financial technology firm headquartered in London that operates foreign currency and crypto exchanges. The ethereum merge has been highly anticipated in the crypto community, and it was finally completed in the wee hours of the morning on Thursday. The change could cut ethereum’s electricity expenditure by an estimated 99.95%, [according to the Ethereum Foundation](https://ethereum.org/en/upgrades/merge/#main-content). Among other concerns, unforeseen bugs in the blockchain could cause outages, which could lead to significant price drops. [Bitcoin’s](https://time.com/nextadvisor/investing/cryptocurrency/price/bitcoin-btc/) prices have gyrated similarly.

The price of ether fell on Thursday after the Ethereum network completed its migration to the proof-of-stake consensus mechanism.

"On the other side, asset managers and holders are actually positioning themselves ahead of a longer-term game," he added. Some analysts have said they expect to see that trade unwind after the merge. Still, the market remains largely macro-driven. It seems likely, then, that if the Merge turns out to have a positive effect on Ethereum's price action, the upside may not be sustainable." Traders had expected to see a decline in the price following the transition late Wednesday night. In August it fell almost 9.3%, compared to bitcoin's almost 17% loss.