Ethereum underwent a major update

Ethereum developers have carried out a major blockchain update called The Merge. The update took place on the morning of 15 September, blockchain platform creator Vitalik Buterin said.

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Ethereum underwent a major update

It marks the transition of the eponymous cryptocurrency from the Proof-of-Work consensus algorithm, in which miners secured the process, to Proof-of-Stake, where the same task is performed by validators, or network users who have contributed their share of coins and locked it down. The entry threshold is 32 ETH.

This work is also rewarded, and the pledged tokens work similar to lottery tickets: the higher the pledge, the more likely one of the tickets is a winner, and the block will be written into Ethereum's "digital ledger".

It is noted that the new transaction processing option will reduce network power consumption by 99.95%. The hardfork is also intended to increase the speed of the network and enhance the decentralisation effect in the crypto world.

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Critics of the innovation say that with the departure of the mining pools, one cohort of big players will be replaced by another. The Lido community now holds more than 30% of the validator share, with another 30% held by cryptocurrency exchanges Coinbase, Kraken and Binance. As for bitcoin as the largest blockchain, there is no sign of an imminent transition to an energy-efficient model.

Ethereum's relatively high fees and slow transactions haven't gone anywhere with the algorithm change, but the network's creator has promised to solve this problem in the future through "segmentation".

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