What is the merge?
The merge was the final step in Ethereum’s plan to completely switch from a proof of work to a proof-of-stake consensus mechanism.
But what does this even mean and how would it affect Ethereum?
Imagine you’re in New York during the roaring 20s the city is bustling attracting thousands of people from different parts of the world while it’s exciting at first with more and more people arriving there’s more pollution and the cost of living starts to go up this isn’t much different from the current state of the Ethereum network which runs on a proof-of-work consensus mechanism proof-of-work or p-o-w describes a system where the network is secured by miners who solve complex cryptographic puzzles that require much electricity, the people arriving in the city represent the millions of Ethereum transactions carried out daily which have caused the network to be congested because of the high volumes of course.
This has led to users paying higher transaction fees and this represents the first problem of the current Ethereum network which is scalability the second problem of such a city is sustainability burning an enormous amount of coal is similar to the energy-intensive activity of the proof-of-work consensus mechanism which is not sustainable for the environment but what if this busted old city could be transformed into a bustling metropolis at the snap of a finger.
Well everybody would go about their daily activities without disruption and in a better more sustainable environment in theory this is what would happen when Ethereum switches to a proof of stake consensus mechanism the eth merge sets a new stage for the Ethereum network to become more sustainable scalable and secure additionally Ethereum’s state and transaction history will remain exactly the same after the merge meaning no action is required on the part of the current Ethereum holders.
For instance, if you are currently a liquidity provider on uniswap you will still be one after the Ethereum upgrade to proof of stake the only difference is that uniswap will now operate on a proof of stake consensus instead of proof of work as you can imagine switching from proof of work to proof of stake is a colossal effort, what is more, is that the developers are trying to do this with the flip of a finger so any network failure during an attempted merge would create a chaotic domino effect and obviously developers don’t want any downtime so their execution has to be flawless this is why Ethereum’s transition to proof of stake was initially divided into two major parts.
Launching the beacon chain and second the merge itself the beacon chain is a separate parallel proof of stake blockchain that was used to run tests without affecting the Ethereum main net or the hundreds of billions of dollars that are secured on it use your imagination hats to think of the beacon chain as a hologram of the new city that’s built to explore how it would function before people would move into it this simulation would give the developers more time to test the latest blockchain and observe if there were any potential faults in the system before the merge in the second step the merge will bring Ethereum’s main net and beacon chain together so that the current proof-of-work-powered consensus layer will be switched out for the proof-of-stake consensus.