Don’t get your hopes up, but Ethereum’s transition to Proof of Stake could happen this August.
What are people at Ethereum saying?
On a discussion at the Permissionless conference, Preston Van Loon, an Ether core developer, stated that the transition will be finished in the next three months.
“As far as we know, August—if everything goes according to plan—it makes sense,” Van Loon added. “Let’s move [the trouble bomb] as soon as possible if we don’t have to.”
According to a tweet from event co-host Bankless, Ethereum Foundation’s Justin Drake, who was also on the panel, there is a “strong desire to make this happen before [the] difficulty bomb in August.”
The Merge was the topic of conversation between Van Loon and Drake. It occurs when the Ethereum blockchain and the proof-of-stake beacon chain converge. This will change the network’s focus from mining, in which users use powerful computers to earn ETH, to staking, in which Ethereum holders deposit their ETH in exchange for rewards.
What is the difficulty bomb?
August is not a random month. Ethereum core developers decided not to patch the system in early May to prevent the so-called “difficulty bomb,” that would soon start to degrade the network. It’s a blockchain component that purposely slows the network. The idea was to push engineers to pursue proof of stake even while making it more difficult for miners to stay on the proof-of-work chain following the transition. This month, core developers chose not to shift their focus away from The Merge, now under testing. Its accomplishment would eliminate the requirement for the difficult bomb to be defused.
Why is Proof-of-stake preferable?
Proof of stake provides various advantages over proof of work to keep the network secure and decentralized. Proof-of-stake consensus should make it easier to engage in network management, allowing for deeper decentralization and increased security.
But the actual reason people are eagerly waiting for The Merge is that it is predicted to reduce ETH issuance by 90%. Less ETH in circulation implies less supply and more demand, pushing the coin’s price upward.
According to CoinMarketCap data, 1 ETH is currently worth $ 2,029. The Merge, as per the most bullish Ethereum speculators, has the potential to push the asset’s value back above its all-time peak of $4,891 achieved in November 2021.
It’s already taken a long time to get the proof of stake. It’s been operational since December 2020, when Phase 0 of what became known as “Ethereum 2.0,” a set of enhancements to grow the network while also making it more secure, was completed.
But that was simply the beacon chain, a proof-of-stake network with limited functionality. People have so far only been allowed to lock their ETH into it in exchange for future rewards. This will change if the existing chain is combined with the beacon chain.
What will come after the Merge?
However, it isn’t the final major upgrade for Ethereum. Sharding, a method of dividing the network into numerous chains, is a key component of the “Ethereum 2.0” concept.
According to the Ethereum Foundation: “Validators only need to store/run data for the shard they’re validating with shard chains, not the entire network (like what happens today). This will reduces the quality and quantity of hardware required.”
Users of Ethereum wouldn’t mind if The Merge moved faster, either.