The significance of Ethereum Merge and its impact on blockchain architecture

The revamp, known as ‘The Merge,’ will cast aside the need for crypto miners and gigantic mining farms, who had previously driven the blockchain under a mechanism called ‘proof-of-work’ (PoW). Instead, it has now shifted to a ‘proof-of-stake’ (PoS) mechanism that assigns ‘validators’ randomly to approve transactions and earn a small reward.

The move to PoS will reduce ethereum’s energy consumption by nearly 99.95 per cent, according to the Ethereum Foundation, a non-profit organisation dedicated to supporting the cryptocurrency and its related technologies.

What has exactly changed?

Ethereum is a decentralised cryptocurrency, meaning that it does not have institutions like banks approving the transactions that happen on its network – the approvals were earlier happening under the PoW consensus mechanism which was essentially done by miners. Miners would compete to solve complex mathematical puzzles using a massive infrastructure of cutting edge computer hardware, and the first one to solve the puzzle would be chosen as the validator. This method was almost entirely dependent on crypto farms, which are massive warehouses lined with rows of computers which would solve the puzzles.

There was, however, one big problem – these mining farms were energy guzzlers, leading to one of the biggest criticisms of the crypto industry that they sometimes consumed more electricity than entire countries, and were therefore a big concern in terms of environmental sustainability.

Enter ‘The Merge’ and the shift to the PoS consensus mechanism. Ethereum is still a decentralised platform, but under the new concept, it would not need miners and mining farms to authenticate transactions anymore. Instead, a validator will be randomly assigned using an algorithm from a pool of people who ‘stake’ their coins, which essentially means pledging at least 32 Ethereum tokens on the network. This would entirely eliminate the need for miners on the Ethereum network.

Why is the ‘Merge’ important?

The development comes amid growing regulatory scrutiny over cryptocurrencies which have taken a severe beating in their value since the beginning of this year. One of the biggest benefits being touted about ‘The Merge’ is that it will make transactions on the Ethereum network extremely secure.

Justin Drake, one of Ethereum’s key researchers leading the migration, explained it in Time Magazine as: “The Merge dramatically increases the security of Ethereum. An attacker needs 51% of the blockchain’s value to [take control]. With Proof of Work, you need on the order of $5 billion, which allows you to buy enough computers and transformers, connect all of them to the grid, and then carry out an attack. With Proof of…