The. Merge.
In what sounds like a twisted dystopian event, is actually the most significant change in the Ethereum protocol’s history. Not just Ethereum, but also for cryptocurrency in general. It signifies one of the most major changes in this technology’s short-lived history.
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This means a lot for web3 too, as it solves some previous criticism for just why we can’t use tech like blockchain in our day to day lives. It has the potential to show the public just how powerful the course of this technology can be. Not only that — Ethereum, as well as other protocols, have ascended the typical “normal” use cases of digital banking and DeFi.
The utility of web3 is becoming more and more apparent, with blockchain only being part of what web3 truly is.
What the heck is it?
Let’s break it down — simply.
For the past 8 years, Ethereum has been using the infamous Proof of Work model to create new coins and run their chain.
Proof of Work is a way for the nodes in a network to reach consensus on which blocks and transactions to include in the network. Basically — it ensures everything on the chain is legit via cryptographic proofs.
However — there was a problem. Proof of Work relies on increasing difficulty to secure its consensus. This meant that every year, Ethereum consumed more and more resources, as crypto miners had to solve harder and harder problems to prove the state of the network.
It was argued that it was for this reason that things like NFTs, and crypto in general were unsustainable given the power consumption created by Proof of Work.
Until now.
With The Merge, this all changes. The Merge essentially replaces Ethereum’s Proof of Work model with a Proof of Stake model. In short, this negates the need for heavy mining power, and instead introduces a way more sustainable way to reach consensus.
It’s called The Merge because there actually has been a beacon chain running alongside to the Ethereum main network for quite some time now. All this time, this beacon chain has been gathering validators, but also it preserves the previous history of the Ethereum network, ensuring only the consensus aspect is affected.
The interesting thing here, is the consensus algorithm is essentially being hot swapped — live. It’s like taking a bike and putting an electric motor on it, while you’re still pedalling it manually on the freeway. Not to fear — Ethereum users do not need to worry about what will happen to their ETH or smart contracts, as it’s just the node owner’s responsibility to upgrade to the new client.
Separation of Layers 🤓
You don’t have to read this part — it just goes over what changed from a highlevel technical perspective.
From a technical standpoint, the merge also represents the separation of layers within the Ethereum protocol. Essentially, there will be multiple clients that have different roles — but can talk to each other if needed.
Pre-merge, everything was bundled into a single client. Post-merge — there are two clients. One is deals with syncing network state (the consensus layer), while the other layer (execution later) focuses on smart contract executions, block production, and and storage.
The glue that holds these pieces together is called the Engine API. The Engine API allows each of these layers to communicate with each other seamlessly.
The separation of layers is actually quite important from a security aspect. For example, lets say one implementation of Ethereum has a crucial bug that allows for blocks to be rolled back. If the majority of the network is using this implementation, then Ethereum itself could become compromised. However — with the separation of layers, there subsequently will be many implementations being used at a time — for both the consensus and execution layers.
This client diversification is highly important for the security of Ethereum, as it reduces the need for the network to rely on a single client or layer implementation.
What it means for the future of web3
Web3 currently lacks one thing — applications. A good part of this was due to how hard it was for developers and companies to adapt to building PoW based dApps. With Ethereum being the only mainstream chain that enabled the building of any sort of practical applications on DLT, The Merge is just one step closer to allowing for wider adoption.
Not only that, but The Merge reduces Ethereum’s power consumption by a staggering 99.95%. As power consumption was often cited as a reason why blockchain cannot be adopted, The Merge demonstrates the viability and evolution of this technology, and subsequently, web3 as a whole.
It’s not even blockchain that will be the end-all be-all for web3, rather it will be an amalgamation of technologies that allows for the true creation of web3. Blockchain just serves as a part of that stack — similar to how a backend is part of a full-stack application.
Major things like The Merge are just the start to normalizing web3 tech.
Conclusion
And that’s wraps! From PoW to PoS, to hopefully even better utility, blockchain is taking a turn for the better. The improvement of blockchain will deeply affect other aspects of web3, and in turn, will allow for greater adoption and normalcy.
In a world where control is something that many lack, web3 intends to give power and data back to the users. This is only the start of a new internet.
Have a nice day and remember: build to learn don’t learn to build.
pce out!
This article was first published here.