- The Merge is the upcoming upgrade on the Ethereum blockchain.
- It will shift the consensus algorithm from PoW to PoS.
- Proof-of-Work based crypto assets are considered harmful to the environment.
The Importance of The Merge
Since the inception of Bitcoin, cryptocurrencies have gained a lot of traction. But with the passage of time, many critics have emerged to cause trouble in space. Especially for digital assets utilizing a proof-of-work consensus algorithm. The PoW mechanism is considered hazardous for the environment due to the increased amount of carbon emissions. This is why Ethereum’s most anticipated update, The Merge, will shift the algorithm from Proof-of-Work to Proof-of-Stake.
The update will merge the current Ethereum blockchain with its Beacon Chain, which is basically an empty chain. At present, it has no decentralized finance (DeFi) apps, no transactions, and is meant to run a Proof-of-Stake mechanism. The move comes following the criticism concerning the Ethereum blockchain being less sustainable for the environment.
The Proof-of-Work algorithm is known for its excess power consumption. According to a report, mining cryptocurrencies like Bitcoin can consume as much energy as required to power a country like Argentina annually. A large mining set-up uses natural resources like coal, fossil fuels, and natural gasses to generate energy to mine the PoW-based digital assets.
The world is already going through major calamities like global warming, climate change, and more. Carbon emissions remain the prime element to contribute to such catastrophes. Elevation in such emissions will lead to increased earth temperature, which will eventually lead to extreme climatic conditions globally. This resembles a Butterfly Effect, a small event (let’s say flapping of a butterfly’s wings) ultimately leading to a chain of events creating a disastrous scenario (like a tornado).
So why is the Merge so important? Because it can significantly reduce the effects of PoW blockchain on the environment. According to Vitalik Buterin, this will be the next big thing to happen in the cryptosphere since Bitcoin’s emergence. The upgrade’s implementation may lead other ecosystems working on Proof-of-Work consensus to adopt the Proof-of-Stake algorithm.
This upgrade may aid the current circumstances of people residing in underprivileged nations, lurking under the evils of poverty, hunger, malnutrition, and more. How? Look at the situation from this perspective. Citizens of such countries have a hard time surviving normal days, how will they tackle the extreme conditions? Food for Thought.
Source: https://www.thecoinrepublic.com/2022/09/12/the-merge-can-aid-to-global-crises/