Ethereum Merge Deep Dive: Why is Ethereum suddenly more efficient? - Crypto in Plain English - Episode 252 - by cryptohunt.it

Ethereum Merge Deep Dive: Why is Ethereum suddenly more efficient?

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Welcome to another Cryptohunt Jam Ethereum Merge special, where we spend one minute a day, every day of this week, to explain what the Merge is. In plain English.

Woohoo! Big news! The Ethereum Merge just happened: And if computers and graphics cards could talk, you'd hear a big, worldwide, collective sigh of relief: "Aaaaaaaahhhh".

Before the Merge, those computers had to crank to the limit to process transactions. Now, they just do it like it's nothing and things have become a breeze.

But why is that? Let's take a trip back in history.

When Bitcoin, the first successful blockchain, was invented, the world was a different place: Nobody really thought that crypto would become this big. And nobody envisioned that we'd be using it – not only to move money around – but also to build a new financial system from the ground up.

And so, a method to validate transactions was born that sounded smart at the time: "Proof of Work". It forces computers to solve complex math puzzles - this means operating a Bitcoin computer costs a lot in energy bills, which prevents even the richest of people from operating a majority of them and taking over Bitcoin.

Ethereum also used this method. But over the years, we all realized: This sounds clever, but is actually a pretty bad idea. It doesn't scale up to the millions of transactions humans do every second, and is really, really bad for the environment.

So people said: Processing transactions is a low effort, but the puzzles themselves are the problem. Can we get rid of the puzzles and still keep someone evil from taking over?

And one of those solutions is the method that Ethereum just switched to. It's called "Proof of Stake". Validators, as they are called, have to put up their own money to validate. That also makes it very expensive for someone to take over, with none of the useless puzzles.

And it's good news all around: Energy consumption on Ethereum just dropped by 99.95%. And what about those computers and graphics cards that all just said "aaaaaahhhhhhh"? Well, they just got a lot cheaper, because nobody needs them for Ethereum anymore. And most importantly: A step forward for the planet. We hope for many more of those.

Disclaimer: This podcast references our opinion and is for information purposes only. It is not intended to be investment advice. Do your own research and seek a duly licensed professional for investment advice.