What is 'The Merge' and what are its impacts on the Ethereum network?

Okay, no problem. Let's explain this to you in a conversational way.

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What is "The Merge"?

Imagine you're driving a gasoline-powered car on a highway, and you need to swap its engine for an electric motor, all while the car cannot stop. Sounds crazy, right? Ethereum's "Merge" is pretty much like that.

"The Merge" was a historic and major upgrade to the Ethereum network that occurred on September 15, 2022. It essentially swapped out Ethereum's "engine" from the old one to a new one.

• Old Engine: Proof-of-Work (PoW)

  • You can think of this as a "mining" system. Countless computers (mining rigs) worldwide furiously perform hash calculations, like solving an incredibly complex math problem. Whoever solves it first gets the right to record a new ledger (block) on the blockchain and earns some Ether (ETH) as a reward.
  • Biggest problem: Extremely power-intensive! Because it encourages competition using more powerful computing, it leads to massive energy waste and is very unsustainable.

• New Engine: Proof-of-Stake (PoS)

  • This system no longer relies on a "computing power race." To participate in recording transactions, you no longer need to compete with computer performance. Instead, you need to "stake" your own Ether as collateral.
  • You can imagine it as paying a large deposit to run as a validator. The system randomly selects a "staker" to record transactions. As long as you work honestly, you earn rewards, much like interest. But if you try to cause trouble or record false transactions, your staked coins will be confiscated by the system (this process is called Slashing). This system is often described as "those with money contribute money," using economic incentives to secure the network.

So, "The Merge" refers to the historic moment when Ethereum's original mainnet (which had been processing transactions) and a new, PoS-based Beacon Chain finally "merged" into a single chain. From that moment on, Ethereum officially bid farewell to the mining era and fully transitioned to Proof-of-Stake.

What are the Impacts of "The Merge" on the Ethereum Network?

This engine swap has had enormous and far-reaching impacts, mainly in the following areas:

1. Energy Consumption Plummeted by 99.95%: This is the most direct impact!

This is the Merge's most remarkable achievement. Without the frantic operation of global mining rigs, Ethereum's network energy consumption became almost negligible. To put it into perspective, it's like the total electricity consumption of a medium-sized country suddenly dropping overnight to that of an ordinary small town. This completely shed Ethereum's "environmentally unfriendly" label.

2. Ethereum (ETH) Economic Model Changed: From Inflation to Potential Deflation

• Reduced Rewards: In the PoW era, a large amount of new ETH was issued daily as rewards to incentivize miners. After switching to PoS, rewards for validators were significantly reduced by approximately 90%. This means less new money (ETH) is being minted.
• Burning Mechanism: Ethereum also has a mechanism (EIP-1559) where a portion of the transaction fees is "burned" with each transaction, meaning that portion of ETH permanently disappears.
• Result: "Less new money minted" + "Existing money continuously burned" = The total supply of ETH grows extremely slowly. When network activity is high, the amount of ETH burned can even exceed the amount newly issued, leading to a "deflationary" state for ETH. This is a very positive signal for the long-term value of ETH.

3. Enhanced Network Security

Many believe PoW is more secure, but PoS is, in some ways, even more secure. To attack a PoW network, you would need to control 51% of the global computing power, which would cost astronomical amounts in hardware and electricity. To attack a PoS network, you would need to control a vast amount of staked ETH, which also represents an astronomical cost. More importantly, if you are found to be acting maliciously with that ETH, your massive staked assets will be forfeited by the system. An attacker would essentially be burning their own money to attack, making such an attack economically unviable.

4. Paving the Way for Future Scalability (But with a Few Common Misconceptions)

"The Merge" itself was foundational work; it cleared obstacles for subsequent upgrades (such as sharding technology), allowing Ethereum to handle more transactions and become faster in the future.

However, there are a few important misconceptions that need clarification:

• Misconception 1: Gas fees (transaction fees) will decrease after the Merge.
  • They will not. The Merge simply swapped the engine; it didn't widen the highway. Reducing transaction fees is something subsequent upgrades (like Danksharding and Layer 2 scaling solutions) are designed to address.
• Misconception 2: Transaction speeds will become incredibly fast after the Merge.
  • Little change. Block time stabilized from an average of about 13 seconds to 12 seconds, which is a difference ordinary users will barely notice. It addressed the fundamental issue of the consensus mechanism, not the speed of individual transactions.

In Summary

All in all, "The Merge" was not a minor update; it was the most important and fundamental technological transformation in Ethereum's history.

It didn't immediately make transactions faster or cheaper for ordinary users, but it fundamentally changed how Ethereum operates at its core, making it more environmentally friendly, more secure, and with a healthier economic model, laying a solid foundation for it to become the true "world computer" in the future.