The Merge is a 2022 update to the Ethereum network that transitioned Ethereum from PoW to PoS.
The Merge is a major upgrade made by the Ethereum network on September 15, 2022. This update switched Ethereum from its old Proof-of-Work (PoW) system to a new Proof-of-Stake (PoS) system. With this upgrade, the network became faster and reduced its energy use by about 99%.
The Merge brought together two parts of Ethereum: the Mainnet, which handled transactions, smart contracts, and balances, and the Beacon Chain, which used PoS and had been running since December 2020. Before The Merge, the Mainnet relied on Proof-of-Work (PoW) mining, which required a lot of energy to validate transactions..
With The Merge, these two systems were combined, making the entire network run on PoS. In this system, you can stake 32 ETH as collateral to become a validator. Validators are chosen to add new blocks to the blockchain and earn rewards for doing so. If you don’t have 32 ETH, you can still participate by joining a staking pool, where smaller investors combine their ETH and share the rewards. This new setup eliminates the need for expensive, specialized hardware, making it easier for more people to take part in the network.
Ethereum’s old PoW system had some major issues, like high energy consumption, heavy reliance on computational power, and limited scalability. Big mining operations risked making the network more centralized, which went against Ethereum’s goal of being decentralized. By switching to PoS, Ethereum fixed these problems. The new system cut down on energy use, got rid of mining, and made the process of validating transactions more efficient.
The Merge also made sure that everyone’s transaction history, wallet, funds, and balances stayed exactly the same, so the network would experience any disruptions.
By adopting PoS, Ethereum solved important environmental and efficiency challenges while preparing for future improvements. Upgrades like sharding are expected to make transactions even faster, cheaper, and more scalable, making Ethereum’s ecosystem even stronger.
