Today I'm going to present facts about what "Merge" on the Ethereum blockchain is and what it changes. In the end, I will take care of all myths.
What is Merge about?
Merge is the name of the latest upgrade to Ethereum blockchain protocol. It has been tested already on one testnet with success. We are in the final phase of testing before going to mainnet which is planned for 19th September 2022 (if there will be no major issues on testnet).
What will it bring?
It will change the consensus protocol from Proof of Work (PoW) to Proof of Stake (PoS) mechanism. It means that Ethereum will become more eco-friendly because energy consumption will be reduced by ~99.95% - according to the Team. That's it.
What is the difference between PoW and PoS?
Let’s start with how PoW works. It’s based on calculating hash with a proper nonce. But solving such a puzzle needs a lot of calculation power which takes a lot of energy to process.
PoS works in a different way. There is no puzzle to solve. The validator put his ETH at stake when creating a new block. The rest of Validators will check if the generated block is properly calculated and make sure that the Validator is not cheating. If a Validator gets caught on cheating he loses his ETH (at the moment the minimum to become a validator is 32 ETH).
Myth #1: Merge will lower gas fees.
It's only a change of consensus mechanism and will not expand network capacity in any way.
Myth #2: Transactions will be faster.
Transaction speed will remain the same on layer 1.
Myth #3: Validators will be able to withdraw staked ETH
Withdrawals will be enabled in the next upgrade called Shanghai.
Myth #4: Validators will not receive any liquid ETH as a reward for securing a network
Fee tips will be available for Validators to spend immediately.
Myth #5: The Merge will result in downtime of the entire network
Upgrade is designed for transition to PoS with zero downtime.