The Ethereum blockchain is preparing to shift from a “proof-of-work” protocol to
“proof-of-stake” after months of testing during a planned event that’s known as the Ethereum Merge. The Merge is anticipated to take place on or between September 13 and 16, 2022.
What does this mean for ETH investors?
Ether ($ETH) is the native crypto asset associated with the Ethereum blockchain. The crypto asset ETH is not anticipated to see any disruptions to trading as a result of the Merge.
When is the Merge happening?
The Ethereum Foundation says that the Merge will occur between Sept. 13 and Sept. 16, 2022. We’ll provide updates to you as the exact timing details are disclosed.
Why is Ethereum moving from proof-of-work to proof-of-stake?
The Merge is just one piece in a series of planned evolutions to the Ethereum blockchain outlined by its co-founder Vitalik Buterin. The key update is to the way in which blocks are added to the chain, from a proof-of-work mechanism to proof-of-stake.
Proof-of-work: Necessitates miners who validate transactions by solving complex calculations before a new block can be added to the chain. This is the mechanism that Bitcoin ($BTC) runs on, and tends to consume significant energy.
Proof-of-stake: Miners are replaced by “validators,” who stake the ETH they own in order to validate new blocks on the chain. Stakers, who must own significant ETH to be eligible, are then compensated in crypto for their role in the process.
The Ethereum Foundation says the impending Merge upgrade will reduce energy consumption by more than 99%. This particular evolution to Ethereum will not address issues like high gas fees, though Buterin has outlined plans for future improvements to the blockchain.
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*This information is for educational purposes only and is not investment advice. See Public.com/disclosures/.