Ethereum merge

Quick definition

The Ethereum merge is the point at which two Ethereum switches to a proof of stake blockchain.

Key details

  • The merge is a process where the Ethereum blockchain changes from proof-of-work to a proof-of-stake.
  • Since 2020, Ethereum has been running two blockchains in parallel to develop the technology necessary to move away from a energy intensive mining process
  • The merge is the point at which the test chain, known as the ‘beacon’ blockchain, is combined with the main blockchain

What is the Ethereum merge?

The Ethereum merge refers to the process where Ethereum becomes a ‘proof-of-stake’ cryptocurrency. Since its foundation in 2015, Ethereum has run as a ‘proof-of-work’ blockchain, one that requires significant energy resources. The merge is the point at which it transitions from one to the other.

There are a few different reasons for the change, and environmental factors and scalability play a big role. The transition to proof-of-stake means that Ethereum will consume 99.95% less energy, according to the developers, and it will also introduce ‘sharding’, which is a method of breaking down data to enable it to cope with more information simultaneously.

As part of the development process, Ethereum has been running two blockchains since December 2020; the existing blockchain, known as the ‘mainnet’, which stores the Ethereum code and the entire history of all transactions made on the network, and the ‘Beacon’ chain, which uses the new technology. When the merge takes place these two will become one.

When is the merge happening?

It’s supposed to take place by the end of Q2 2022, which means before June. This date is not set in stone, however, and it’s possible the merge could be pushed back if there were any issues with either blockchain or more developer resources were needed elsewhere.

What happens to ETH after the merge?

In theory, nothing should change. The merge is simply the means by which it transitions to a new method of approving transactions and it shouldn’t have any material impact on the coins you own.

However, a successful merge might be very good news for ETH’s long term prospects. One of the barriers to Ethereum’s success up to now has been a lack of scalability compared to newer systems like Solana and Avalanche, which already use proof-of-stake. The merge could help Ethereum overcome those challenges.

Where can I learn more?

We have covered the merge in more detail right here on Invezz. Learn more about why the Ethereum merge is happening and what it means for ETH’s long term prospects, or find out how to buy Ethereum in preparation for the change.

Fact-checking & references

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James Knight
Lead content editor
James is the lead content editor for Invezz, covering the stock market, cryptocurrency, and macroeconomic markets. Outside of work, James is an avid trader and golfer… read more.