Ethereum, the second-largest blockchain and cryptocurrency project by market capitalization is set to execute the biggest upgrade on its network this September.
The upgrade dubbed "the Merge" will transition the Ethereum blockchain from being a proof-of-work (PoW) network to a proof-of-stake (PoS) blockchain. Proof-of-Work is the earliest consensus algorithm and it involves mining to produce blocks whereas, in proof-of-stake, crypto staking is the technique adopted.
Ethereum blockchain currently charges high transaction fees from users and it is not very scalable when compared to other blockchains like Solana and Cardano. High transaction fees and lack of scalability are the major problems associated with the Ethereum blockchain.
According to Vitalik Buterin, the co-founder of the largest smart contract platform, The Merge upgrade is scheduled for September 15. Importantly, the Merge aims to make Ethereum more scalable and complete.
At the end of the upgrade roadmap including the Surge, Ethereum will be 55% complete and will also be able to process 100,000 transactions per second (TPS), Vitalik Buterin stated.
Post-Merge Ethereum Fork, Ethereum POW
While the Merge is a welcomed development, it is bad business for Ethereum crypto miners as a major source of income will be taken off the market after the Merge.
Owing to this, Chandler Guo, a popular Chinese cryptocurrency miner, and other miners noted that they would carry out a fork on the Ethereum network after the Merge runs through the blockchain. This platform intended to be named Ethereum POW (ETHPOW) will allow miners to still carry out their financial activity on the largest smart contract platform.
Several crypto exchanges like Poloniex, MEXC, and BitMEX have already listed ETHPoW, a token that is yet to be in existence. The highly controversial Tron (TRX) founder, Justin Sun is among the supporters of the miner-led post-Merge Ethereum fork.
Justin Sun noted that proof-of-work is essential in the crypto industry as the space is overcrowded with proof-of-stake blockchain platforms. This he said is one of his reasons for supporting the post-Merge fork. Additionally, he explained that proof-of-work guarantees higher security for users.
Meanwhile, Vitalik Buterin has said that he doesn't expect the planned Ethereum POW fork to succeed and also warned investors.