You may have heard of Ethereum 2.0, a proposed update to the Ethereum platform. The Ethereum Foundation has renamed this initiative Ethereum Merge. In crypto history, the Ethereum Merge has been referred to as "the single most significant event."
The goal of the Merge is to improve the Ethereum blockchain's efficiency. It will do so by transitioning from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism. Currently, Ethereum is running both of these mechanisms. The Merge occurs when these two separate systems are finally combined into a single proof-of-stake-based chain at the end of the process.
The Ethereum Foundation provides an easy-to-understand example for the Merge: Imagine Ethereum as a spacecraft that isn't quite ready for an interstellar voyage. The Beacon Chain has helped the community build a new engine and a stronger ship. When the time comes, the current ship will dock with the new system, merging into one ship capable of putting in serious lightyears and taking on the universe.
Benefits of the Merge
Ethereum's scalability, security, and long-term viability are all expected to improve with the implementation of proof-of-stake. The blockchain's miners would become obsolete, thus reducing the network's carbon footprint and energy consumption by 99.95 percent.
In 2016, the Merge was initially proposed as a potential solution. The shift has been more difficult than imagined. Tim Beiko, a lead developer at the Ethereum Foundation, stated that the Merge would take place in the months following June 2022. "There's a lot of skepticism," he says, "because Ethereum has promised proof-of-stake for the past five years." It's difficult to persuade people that this time is different.
So, you may be wondering what the Ethereum Merge will do to your current Ethereum holdings? Nothing. In this case, there will be no additional coins or tokens created. No action is required from anyone who owns any ETH. We are confident that Ethereum will emerge as the most powerful, widely used, trustworthy, and energy-efficient blockchain network on the planet.