POW- Out , POS - In . ETH 2.0

Ethereum is transitioning to a more sustainable architecture — the long-awaited Merge. The project, which is said to be the culmination of nearly three years of work on the Ethereum blockchain, is expected to be one of the most pivotal events in the history of the crypto industry.

Although many believe that the Ethereum Merge should mark a new beginning for a network already used by millions, there are concerns about the transition to Proof-of-Stake (PoS) and what it could mean for the blockchain's future.

Since its creation almost a decade ago, ether has been mined through a proof-of-work model. It involves complex math equations that massive numbers of machines race to solve, and it uses an abundance of energy.

The new proof-of-stake method requires users to leverage their existing cache of ether as a means to verify transactions and secure the network.

The hallmark of ethereum's big makeover is that it will take a lot less energy to verify transactions, which has long been a major problem for the crypto industry.

The proof-of-stake model, which is replacing the proof-of-work model, requires validators on the network to put up their ether tokens, or "stake" them, essentially pulling them out of circulation for an extended period of time, in order to secure the network.

• THE ETHEREUM SCALABILITY PROBLEM AND THE MERGE COMING TO THE RESCUE

The Merge, set to take place on Thursday, September 15, is the most significant development to hit the Ethereum blockchain since its inception and one of the biggest upgrades in the history of crypto. The Merge is expected to resolve several problems, most notably the scalability issue.

Scalability has been a problem for the Ethereum blockchain since its inception, with the blockchain designed to handle only about 30 transactions per second.

Although this was initially sufficient, the explosive growth of blockchains in recent years has rendered it insufficient.

Hundreds of thousands of decentralized applications (dApps) are currently processing transactions on the Ethereum blockchain but it is significantly underperforming at its current throughput.

However, the Merge is said to finally include sharding, a scalability feature that will divide the blockchain into multiple chains. Each chain will operate independently and validate transactions on its own.

The implementation of sharding is expected to increase the blockchain's throughput to around 100,000 transactions per second, which is much better for large transaction counts.

• STAKING POOLS AND THE CENTRALIZATION CHALLENGE .

Wonders shall never end they say but I do not think one will ever see a wonder of a leopard losing it’s spots.

Although the Merge should have no trouble with scalability, there is one major issue that has yet to be addressed; decentralization.

The Ethereum blockchain has become increasingly centralized over time, with a few mining pools wielding significant power over the network and its consensus.

Due to the PoS consensus algorithm, the Merge should bring about a change in this, but this is only a surface superficial solution.

As a result of the switch to PoS, the Ethereum blockchain will see increased capital inflows as more people look to stake their ETH and earn returns.

Several major exchanges have already stated their support for ETH 2.0 staking. With more people expected to participate, the same centralization issue that existed in PoW Ethereum may resurface in PoS.

The current evolution of Ethereum appears to extend far beyond its current platform with several exchanges and protocols allowing their users to stake ETH 2.0.

All of these platforms have become active stakeholders in the long-term future of the blockchain. Key decisions on these platforms may have a long-term impact on the blockchain.

Drawing the curtains on this post, I feel with the upgrade, ethereum won't become faster, cheaper or more scalable. For me if the user experience feels the same after the merge , that will be one sign that the merge was a total success.

The real investor draw and attraction is the slashing of energy usage, especially as bitcoin mining continues to face blowback for its growing power consumption.

The merge will result in a reduction of at least 99.95% in total energy use.

The significant reduction in energy consumption post-merge may enable some institutional investors to purchase the token that were previously prohibited from purchasing tokens that run on blockchains leveraging proof of work (PoW) consensus mechanisms.

Institutional money is key to the maturation of digital assets. A successful merge would cement ethereum as the "premier blockchain network."

Ethereum has set itself apart from rival chains, as more of an operating system for the industry. The vast majority of apps are built on top of ethereum, and the merge is the first in a series of planned upgrades that should ultimately result in faster and cheaper transactions.

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