September heralds one of the most important and anticipated upgrades to the Ethereum chain. We’re talking about the Ethereum Merge, which will see the current Ethereum mainnet merge with the proof-of-stake Beacon Chain network in mid-September.
According to the Ethereum Foundation website, the client developers are working towards a soft deadline of September 19. However, this timeline could change depending on the outcome of the final testnet merge, continued client refinements, and hashrate of existing miners continuing in a predictable manner.
While much has been written and reported about this sea change affecting the world’s second most popular digital token, there remains a number of misconceptions among crypto users concerning the changes and impact from the Merge.
Let’s take a look at three of the most frequently-asked questions, to see if you’re up to speed in your understanding of what the Merge entails!
Q: Will transactions be faster?
A: Transaction speeds are commonly measured in terms of time to be included in a block, and time to finalization. The Ethereum Foundation says that while there will be “slight changes” to transaction speeds, such improvements are marginal at best and “unlikely to be noticed” by users.
This is because under proof-of-work, a new block would be produced every 13.3 seconds or so. This will be reduced to every 12 seconds on the Beacon Chain, which is about 10% more frequent compared with its predecessor.
So yes, transactions will be slightly faster but the time savings won’t be meaningful to most users.
Additionally, Ethereum core developers say that transaction speeds depend more on the app that utilizes the blockchain – not the chain itself.
Q: Will gas fees be lower?
A: With Ethereum’s notoriously volatile and high gas fees often cited as a key drawback, there are naturally many holding out for lower gas fees following the Merge. However, the Ethereum Foundation explains that this will not happen as the Merge involves a change of consensus mechanism, not an expansion of network capacity.
The shift from proof-of-work to proof-of-stake will not have any material impact on network capacity or throughput – so the same applies to gas fees which are a function of network demand relative to network capacity.
Nonetheless, the move to proof-of-stake paves the way to making rollup transactions exponentially cheaper. This is because the Merge will result in the scaling up of user activity at Layer 2, while relegating the Layer 1 mainnet as a secure decentralized settlement layer for rollup data storage.
Q: Will be there an increase in scalability?
A: Along with its gas fees, Ethereum’s scalability (or lack of) was another controversial issue that came up time and again. With the growing prevalence of blockchain technology and smart contracts, there were expectations for the Ethereum network to scale up to accommodate the multitudes of applications built on it.
However, the Ethereum network’s limitation was that it could only process 7-15 transactions per second – instead of the hundreds of thousands of transactions per second expected for a network of its stature.
Unfortunately, the Merge won’t be a step change in improving Ethereum’s scalability. Scaling will take place at the next phase of its evolution known as “The Surge”, where the network will be made more expandable through products such as sharding. The latter involves breaking up data on the Ethereum blockchain into smaller pieces, which will increase scalability by reducing network congestion and boosting transactions per second.
With Ethereum founder Vitalik Buterin noting that the network will only be roughly 55% complete after the Merge, we can look forward to more rounds of upgrades that promise to bring transformative change. Get set for more exciting times ahead for Ethereum!