The Merge- Saviour of the Cryptoverse?

This is one of the biggest developments in the Crypto space and has completely altered the scene for crypto even though on one hand we have FTX which is one of the largest bitcoin company whose owner got into a pretty big scandal and lost 10 Billion USD overnight the Merge is a pretty big win for crypto.

Crypto Mining

Before we get into the Merge let’s do a little refresher on Crypto Mining and the Blockchain. How about we see it as a Race where a lot of computers try to solve a complex math problem just to obtain what we know as a block which on the bitcoin blockchain holds 1 MB of space Each block holds around 2000 transactions which the computer verifies and the transactions get added onto the blockchain which is a grid of blocks all strung together.

But why do people set up these large computer mines to solve a bunch of complex maths problems the answer is that they do it because whosoever’s computer solves the problem first gets a reward of around 6.25 bitcoins which is roughly around 125,000 USD.

“Cryptocurrency is such a powerful concept that it can almost overturn governments.” — Charles Lee, Creator of Litecoin

This complex process is called Proof of Work and needs a lot of energy to make these machines then the electricity required to run them and also ACs to cool them down as they get really hot solving complex math problems. But all these problems may have just been solved!

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The MERGE

Rather than computers racing to mine the crypto first, The Ethereum Blockchain has now shifted to a Proof Of Stake POS form of verification where Validators would have to take a stake in the process and on a random basis selected by a very complex process one computer gets selected to carry out the very simple verification process. As of the merge, the power consumption of The Ethereum Blockchain has dropped by 99.5%.

This was achieved in 2 Stages :

First- Deploying the Beacon chain which was a parallel blockchain deployed to check out the POS method.

Second- Merging the Beacon chain and the main Ethereum Blockchain into one. Which is known as THE MERGE

This had to be done without stopping the blockchain as it would lead to a very big loss for everyone as transactions stop getting verified for some time. The Merge has now allowed Ethereum to go ahead with it’s plan of scaling up the Ethereum Blockchain as now it can do more than a Million transactions every second compared to the few hundred it did before. But is the Cryptoverse actually saved?

Everything is not good in the Cryptoverse

It should be noted that though Ethereum is one of the biggest blockchains out there it isn’t the only one. Owners of all these massive computers will not just abandon these computers and leave everything. Most of the miners are switching to different blockchains who have not yet adopted the POS system so the overall energy consumption isn’t actually being reduced it’s just being Transferred.

Even then it just solves one of the million problems Crypto is facing right now. Not to mention the Volatility of crypto which means that one bitcoin may value up to 65000 USD one day and drop to 35000 USD the next day. We also have the problem of Regulators, where many countries are openly accepting crypto many countries like China are banning Crypto moreover many countries are planning to make crypto register with the government which completely defeats its main purpose of providing autonomous and secure transactions.

So even though The Merge is a very big step in the right direction all is not well in the Cryptoverse.