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There is going to be a very important event this year on the Ethereum network, as the network merge is happening this year, as announced by the team behind the Ethereum network on various platforms. Although the current state of the Ethereum network is running smoothly without any hindrances, the update is intended to increase its functionalities and make the network better. The higher gas fees issue will be resolved. We will experience a transition to Ethereum 2.0
The whole concept behind the merge is to move the network from the Proof of Work (PoW) consensus mechanism to Proof of Stake (PoS). The majority of the other alternative blockchain networks use proof of stake as their consensus mechanism. In Proof of stake, the holders of the native token act as the validators of the network. This helps reduce energy consumption and increase efficiency.
When the Ethereum merge is successful, holders of ETH will now be serving as the validators and those with the highest holdings will be able to contribute to the network growth. This will reduce the energy consumption and increase the network scalability.
Most of the activities of the Ethereum network, such as creating and validating new blocks and rewarding validators, are currently carried on through the Beacon chain. It is a Proof of Stake chain that runs parallel to the Proof of Work Ethereum main net, which secures user accounts, balances, and network state, and this hinders the efficient use of smart contracts by the Ethereum network. After the merge, the network will be fully Proof of Stake as the mainnet will be replaced by a proof of stake consensus and the smart contracts will be fully based on proof of stake.
We are all aware of the higher gas fees of the Ethereum network. After the merger, the gas fees are expected to reduce and users can buy, sell, create NFTs, etc. with fewer transaction fees. Currently, the transaction rate of the network is approximately between 13–20 transactions per second, which is very slow when compared with other alternative blockchain networks. This also contributes to higher gas fees for the network because, when many people are trying to trigger transactions at the same time, this will increase the cost. There are many other advantages of the merger, and I believe it will have a great positive impact on the network. What do you also think about the event? Do you think it will have a positive impact on the crypto space? You can share your thoughts through the comment section.
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Yours @salamdeen