Discover the key changes, implications, and new developments of the Ethereum Merge.
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Ethereum Merge Summary
The Ethereum Merge is planned for September 15th, 2022. The blockchain's Beacon Chain (settlement layer) will merge with the existing Mainnet (the execution layer) and Ethereum's consensus mechanism will be transitioning from Proof of Work to Proof of Stake. With the change in consensus, there will be an elimination of energy-intensive mining, as miners will be replaced by validators; this will reduce Ethereum's energy consumption by ~99.5%.
In addition, new economics of Ether ("ETH"), the blockchain's native currency, will include a 90% reduction in newly minted ETH which are distributed as block rewards. In addition, validators will be required to stake 32 ETH, reducing the available circulating supply.
This is not the end of Ethereum’s key upgrades. The upcoming Shanghai update will first enable staking withdrawals for ETH that’s currently locked in a staking contract. Then newly introduced features will be rolled out in phases with a focus on increasing scalability. This will include the introduction of sharding, rollups, and eventually verkle trees.
Ethereum is a second generation blockchain and an open-source computing platform which can facilitate the exchange of value in a peer-to-peer manner, but can also host applications and carry out programmatic coded instructions, known as smart contracts. It is a second generation blockchain and the second largest by market capitalization behind bitcoin.
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