Ethereum’s switch to the Proof of Stake consensus process, which has been postponed for years, has a new provisional date: around September 19th the developers want to take the final step away from power-hungry mining. As is so often the case, this date should also be treated with caution. Developer Tim Beiko spoke on Twitter of a rather softly defined target period.
Until then, the tests and preparations for the big change will continue: A few days ago, the ninth so-called shadow fork of the mainnet took place – these are small forks from a main chain that are operated with a few nodes. They are intended to serve as an environment for testing under more realistic conditions than in a test network. The Sepolia test network was also switched to Proof of Stake at the beginning of July. Now only the test network Goerli/Prater remains open before it goes to the mainnet. For the last testnet, a transition around August 11 is targeted.
The mechanism known as “Difficulty Bomb” or “Ice Age” was pushed back again with an update. This “bomb” drastically increases the mining difficulty within a few weeks in order to make mining unattractive and thus attract as many network participants as possible to the PoS chain. According to the current circuit, this would have caused unbearably lame block generation from August. With the update called “Gray Glacier” from the end of June, this will be pushed back by 700,000 blocks, which means a delay of around 100 days.
Crypto winter over again?
The crypto market has seen a significant increase since the plans became known. Unlike usual, however, the Bitcoin does not pull the remaining coins up with it. Rather, ether seems to be the driver: According to figures from Coinmarketcap, the currency of the ethereum network increased by 45 percent within a week and reached a value of over 1500 US dollars for the first time since the price slides in June.
Coins that are closely intertwined with the Ethereum ecosystem or at least associated with it benefited from the upswing: Polygon increased by around 65 percent in seven days to just over 90 cents, Lido even by over 160 percent to 1.5 US dollars in the period . Even the Ethereum fork, Ethereum classic, surged over 80 percent. Even if Ethereum classic has also adopted numerous updates from Ethereum, one still wants to remain true to the Proof of Work.
Bitcoin is currently lagging behind the field and is currently trading at around 22,000 US dollars with a plus of almost 12 percent in seven days. According to Coinmarketcap, the total market capitalization of cryptocurrencies is again over one trillion US dollars. However, all these figures are still a long way from the record prices of last summer. It remains to be seen whether the upcoming merge of Ethereum will mean the end of the crypto winter that has just begun.
From miner to validator
Ethereum’s transition is usually referred to as a merge, because it is about merging the execution layer still working with Proof of Work with the Beacon Chain using Proof of Stake in the existing mainnet. The Beacon Chain has been operational since the end of 2020. It introduces a consensus layer in which blocks are then no longer confirmed by finding matching hashes, which is computationally and power-intensive.
Instead, there is now the role of the validator. To become a validator, one must deposit a minimum amount of ether and run a full node (currently 32 ether); Alternatively, you can also participate in a validator pool with a lower minimum deposit without a full node.
scaling problem remains
If validators confirm blocks truthfully, they receive coins – called staking – as a reward. If malicious validators send false results to the network that other participants cannot confirm, the deposited ether share is reduced. According to current data, over 10 million ethers have already been deposited for staking. The energy required to confirm new blocks in the blockchain should then suddenly fall by 99.95 percent.
The scaling problems of Ethereum will not change much even with a successful merge. So far, high network utilization with many transactions had repeatedly pushed up the gas execution fees. Especially as a result of the NFT hype, which has since faded, it sometimes happened that the fees were higher than the value of the actual transactions. The next step on the roadmap is intended to help with scaling: “Sharding”. For this purpose, Ethereum is to be divided into 64 smaller block chains.
Fixed misleading wording regarding Ethereum classic.