Ethereum, the second-largest cryptocurrency, has switched to proof-of-stake, reducing energy requirements. Transition, which has been in the making since 2016won’t change much for the average Ethereum user, but it will sideline miners.
The switchover started on September 6, when the Bellatrix upgrade was activated. It is now completed after mining the Terminal Total Difficulty block, which caused the Paris upgrade. The technical part is done; now let’s see what happens.
There is a risk of bugs, hacks and price instability in the coming hours and days. There is also the risk of forks, where multiple versions of Ether are created by miners on different chains, resulting in confusion and an environment ripe for scams.
Before the Merge, Ethereum ran on proof-of-work, where computers around the world competed to solve puzzles so they could add a new block to the chain. That was pretty energy inefficient because all these miners had to solve the puzzle at the same time, but only one could win; all other energy was wasted. Proof of stake, on the other hand, has validators who have pledged their Ethereum as collateral. If they misbehave, they lose the Ethereum they staked.
Update Sept 15, 3:53 AM ET: Added confirmation tweet from co-founder Vitalik Buterin and a paragraph about what comes next.