Ethereum’s update ‘Merge’, one of the leading blockchains, is set to be released in September. Ethereum’s developers are recoding its mining protocol from a proof-of-work (PoW) system to proof-of-stake (PoS). This is likely to greatly reduce the energy consumption of Ethereum.
Tim Beiko, one of the developers of the Ethereum Foundation, took to Twitter to announce the update’s release in September. He said that some more tests of the network will be done before it is released for use. These tests will help developers understand the performance of the network after the upgrade. More than $100 billion of decentralized finance (DeFi) apps are supported on this blockchain, and because of this, the upgrade is being cautious. There have been hurdles in this project before.
This upgrade recently completed a trial on the public test network Sepolia. The Sepolia testnet will be monitored for the next few days. The developers of Ethereum explained in a blog post that Sepolia is the second of three public testnets for Merge. The delay in the upgrade is also affecting the price of Ether. The second largest cryptocurrency by value has seen a significant drop in price over the past few months.
The upgrade may also bring relief to investors in the crypto derivative token called stETH. Ethereum miners have to use large server farms to order transactions on the blockchain, resulting in higher electricity consumption .and carbon emissions increase. One estimate stated that the electricity usage of one Ethereum transaction is equivalent to 1,40,893 Visa credit card transactions. After this upgrade, orders for Ethereum transactions will be placed from stakers. This system is called Proof of Stake. There was a shortage of electricity in some countries due to crypto activities. To tackle this problem, China banned crypto mining last year. In some other countries, crypto mining is being opposed for the same reason.