Ethereum merge

At 6:42 A.M. Coordinated Universal Time (2:42 A.M. EDT), the Ethereum blockchain merged with a special-purpose decentralized ledger called the Beacon Chain, ...

The exact time is [yet to be announced.](https://twitter.com/EthereumPoW/status/1570323388358602752) [tweeted](https://twitter.com/EthereumPoW/status/1569428021437935617) on Sept. Miners are being replaced with validators, who pledge, or stake, ether tokens as collateral to verify transactions and accrue interest on the staked assets as a reward. Ethereum underpins the vast majority of Web3 applications such as decentralized finance protocols and non-fungible tokens (NFTs), as well as ether, the second-largest cryptocurrency with a $195 billion market value. The approach has drawn widespread criticism from crypto-skeptics and environmentalists because of its immense energy usage—Ethereum’s carbon footprint Since its inception, Ethereum has been based on the proof-of-work system for running a blockchain.

Ethereum's core developers already have their eyes set on the network's next upgrade, Shanghai. What it will consist of, however, is up for debate.

[rolling collections of transactions into a unit](https://decrypt.co/resources/what-are-ethereum-rollups-scaling-solution-cut-transaction-costs) that is presented to the Ethereum blockchain as a single transaction. Van Der Wijden is confident though that the upgrade will occur within the next year. “Some of the more research-focused people don't really consider that all of this has to be implemented and tested,” said Van Der Wijden. There have been no updates made to the EVM in over two years, in part because incorporating those improvements into the merge would have created a massive headache for developers. Staking ETH will allow these entities to generate and collect new ETH as a reward for proving the computing power necessary to validate transactions and secure the network. And once again, the decision will have multi-billion dollar implications.

Two major news events could rock the crypto market this month. Here's what experts think, and why it matters for crypto investors.

[ethereum](https://time.com/nextadvisor/investing/cryptocurrency/price/ethereum-eth/) [merge](https://time.com/nextadvisor/investing/cryptocurrency/ethereum-merge-price-this-week/) took place on Thursday, completing one of the largest events in crypto to date. One thing’s for sure: If the last couple years have taught us anything, it’s that crypto prices are highly volatile and difficult to predict. “We believe bitcoin should ultimately be used as a proxy for direction in the broader crypto market,” Kruger said. The market is particularly volatile right now, as inflation numbers send crypto and stock prices tumbling ahead of another likely rate increase next week at the Fed meeting. [saw similar tumbling](https://time.com/nextadvisor/investing/latest-stock-market-news/) following the CPI release, and the crypto market has increasingly tracked the stock market in recent months. “Given how things have been correlating, and considering this latest inflation data, we expect more downside pressure in crypto as investors are forced to contend with the reality of higher for longer monetary policy that strains growth prospects and weighs on sentiment. The Fed is essentially attempting to cool down the economy in order to rein in rising prices. “There’s no doubt the CPI report has triggered a fallout in risk assets and crypto markets by extension,” said Joel Kruger, Market Strategist at LMAX Group, a financial technology firm headquartered in London that operates foreign currency and crypto exchanges. The ethereum merge has been highly anticipated in the crypto community, and it was finally completed in the wee hours of the morning on Thursday. The change could cut ethereum’s electricity expenditure by an estimated 99.95%, [according to the Ethereum Foundation](https://ethereum.org/en/upgrades/merge/#main-content). Among other concerns, unforeseen bugs in the blockchain could cause outages, which could lead to significant price drops. [Bitcoin’s](https://time.com/nextadvisor/investing/cryptocurrency/price/bitcoin-btc/) prices have gyrated similarly.

Ethereum's impending shift to proof-of-stake could not have happened without researchers, developers, volunteers and many, many client teams.

CoinDesk is an independent operating subsidiary of [Digital Currency Group](https://dcg.co/), which invests in [cryptocurrencies](https://dcg.co/#digital-assets-portfolio) and blockchain [startups](https://dcg.co/portfolio/). What’s next: Edgington is particularly proud of the work he has done to shift Ethereum to a proof-of-stake model with its implications for network security and environmental responsibility. Van Der Wijden also worked closely with Parithosh Jayanthi, Mario Vega and Marek Moraczynski on shadow forks for the Merge, in order to make sure that all clients implemented the specs correctly. Zouarhi joined ConsenSys as a research engineer in 2017 and then became a product lead for Besu, an execution client of Ethereum, until June 2022. What he did: Many have said that Jayanthi pioneered the testing of the Beacon Chain. He accepted the position and contributed part-time while finishing up his degree. Edgington is the lead product owner at Teku, an Ethereum client built by ConsenSys, an Ethereum research and development firm. From there, Van Der Wijden quickly became part of the open-source team of Etherminer. What he did: Drake made major research contributions to the architecture of the Beacon Chain – Ethereum’s proof-of-stake network. “If something goes wrong in our software, it could have serious repercussions on the network as a whole.” In addition, Beiko is excited to address the Execution Layer and Consensus Layer governance processes harmonizing, though that isn’t as “sexy.” Instead, scores of individual developers, researchers, client teams and volunteers spent thousands of hours over the years, working out the nitty-gritty technicalities of how the shift could be accomplished.

Like Bitcoin, Ethereum had been approving new transactions on the blockchain with a consensus mechanism called proof of work, whereby “miners” race to solve ...

One popular miner has said he’ll “hard fork](https://gizmodo.com/ether-proof-of-stake-merge-crypto-mining-1849502453)” the network, splitting off the code to preserve a [separate chain](https://fortune.com/2022/09/13/ethereum-miners-fork-merge/) (as [ some did](https://www.sofi.com/learn/content/ethereum-classic-etc-vs-eth/) in 2016 to preserve a previous incarnation of Ethereum). [legal investigations](https://tax.thomsonreuters.com/news/sec-enforcement-director-cites-more-intentional-shift-in-articulating-crypto-analysis/), [plummeting token prices](https://time.com/nextadvisor/investing/cryptocurrency/are-we-in-crypto-winter/), and public exhaustion with [celebrity endorsements](https://www.nytimes.com/2022/05/17/business/media/crypto-gwyneth-paltrow-matt-damon-reese-witherspoon.html) and hype cycles. Buterin has claimed that the Merge makes Ethereum’s network [more secure](https://coinjournal.net/news/the-ethereum-network-will-be-more-secure-after-the-merge-says-vitalik-buterin/), but some experts have suggested that the [opposite](https://cointelegraph.com/news/ethereum-merge-makes-network-more-vulnerable-to-attack-security-expert) is the [case](https://zycrypto.com/ethereum-merge-could-open-the-network-to-attacks-from-bad-actors-says-security-experts/), cautioning users to watch out for “ [replay attacks](https://twitter.com/MakerDAO/status/1567953179333066753)” where scammers can record a transaction on Ethereum’s old chain and repeat it without permission on the new one. In July, Buterin said he’d consider Ethereum only [55% “done” after the Merge](https://fortune.com/2022/07/21/vitalik-buterin-ethereum-merge-ethcc-paris/). The minimum amount you can stake to become a validator is 32 ether (ETH), which is worth about $51,000 as of Wednesday afternoon, although individuals can join together in a [staking pool ](https://ethereum.org/en/staking/pools/)to meet the requirement. Although the mechanism was intended to promote decentralization, in practice individuals or groups with access to significant computer power [have](https://www.technologyreview.com/2022/04/21/1049391/miss-out-crypto-revolution/) dominated proof-of-work mining and [reaped those benefits](https://www.coindesk.com/business/2022/02/16/morgan-stanley-says-ethereum-less-decentralized-ether-more-volatile-compared-to-bitcoin/). That move isn’t likely to have a large impact on the ecosystem unless the big platforms recognize it; [OpenSea](https://cointelegraph.com/news/opensea-says-marketplace-won-t-support-forked-nfts-post-merge), the largest marketplace for NFTs, has [claimed](https://support.opensea.io/hc/en-us/articles/9402429763219-How-will-I-be-impacted-by-the-Ethereum-merge-) it will only support proof-of-stake Ethereum. As of 2:43 ET this morning, Ethereum now uses proof of stake, a way to approve new transactions that [promises](https://ethereum.org/en/upgrades/merge) to cut the blockchain’s energy requirements by 99.9% and usher in a new era for the second-largest cryptocurrency. [been key to Ethereum’s vision](https://www.technologyreview.com/2018/12/13/138651/ethereum-thinks-it-can-change-the-world-its-running-out-of-time-to-prove-it/). Proof of stake, on the other hand, requires “validators” to put up a stake—a cache of ether tokens in this case—for a chance to be chosen to approve transactions and earn a small reward. It has also posed [scaling challenges](https://www.coindesk.com/business/2022/02/16/morgan-stanley-says-ethereum-less-decentralized-ether-more-volatile-compared-to-bitcoin/) for Ethereum: network congestion drove up fees and slowed down processing rates, making the network too expensive for smaller transactions and hard to scale for larger ones. [race to solve hard math problems using huge amounts of computing power and are rewarded for their efforts in crypto](https://www.technologyreview.com/2022/03/04/1046636/ethereum-blockchain-proof-of-stake/).

The price of ether fell on Thursday after the Ethereum network completed its migration to the proof-of-stake consensus mechanism.

"On the other side, asset managers and holders are actually positioning themselves ahead of a longer-term game," he added. Some analysts have said they expect to see that trade unwind after the merge. Still, the market remains largely macro-driven. It seems likely, then, that if the Merge turns out to have a positive effect on Ethereum's price action, the upside may not be sustainable." Traders had expected to see a decline in the price following the transition late Wednesday night. In August it fell almost 9.3%, compared to bitcoin's almost 17% loss.

Crypto could use a bit of good news these days. And on Wednesday, it got some. Ethereum, the most popular crypto platform, appears to have successfully ...

I’m glad that it happened, and the developers who toiled away for years to make it work should feel proud of how smoothly it went. [believe](https://decrypt.co/109097/dan-held-proof-of-stake-ethereum-merge-pressure-bitcoin-energy-use) that Ethereum’s switch to a proof-of-stake algorithm was a calculated P.R. It’s been a brutal year in crypto, but now that Ethereum has neutralized one of the most common objections to crypto — the enormous environmental toll — they hope that at least some skeptics will come around. But crypto will need more than a successful merge to turn its fortunes around. I’ve talked to a number of crypto industry leaders about the merge, and the general feeling they express is one of cautious optimism. But these days, a lot of people are skeptical of crypto for reasons that have nothing to do with energy. It’s true that a lot of people who are opposed to crypto on principle tend to cite environmental concerns as a strike against it. For reasons that are too complicated to get into here, running the Ethereum blockchain requires destroying (or “burning”) [researchers](https://blog.ethereum.org/2021/05/18/country-power-no-more), the new Ethereum blockchain will consume 99.95 percent less energy than the old one. That’s a huge change — comparable to the entire nation of Portugal going off the grid, [according to Digiconomist](https://twitter.com/DigiEconomist/status/1567635883066630144), a website that tracks crypto's energy consumption. Now, it will be secured by a process known as “staking,” which involves investors agreeing to deposit their crypto coins in a shared pool in exchange for a chance to earn financial rewards. First, it was far from a given that the merge would work.

The upgrade, known as the Merge, will slash the chain's carbon emissions by more than 99% and, just as importantly, shows that a rag-tag band of crypto ...

[Mainnet](https://mainnet.events/agenda) starts this week in Manhattan. The event has already emerged as New York’s pre-eminent crypto conference, and organizers have just added a trio of A-list speakers: [Coinbase](https://fortune.com/company/coinbase) CEO Brian Armstrong; Binance CEO CZ; and the founding genius of Ethereum, Vitalik Buterin. A long-time crypto skeptic (Smith describes “the vast majority of web3 uses [as] a form of unregulated financialization), he makes the case that instability in places like Russia and China is likely to create waves of refugees looking to flee with their assets. The “wen” reflects the crypto world’s penchant for goofy phonetics, and is most commonly found in the phrase “wen moon?” that asks when prices will soar. "Crypto-facilitated capital flight from China and Russia would likely strengthen the dominance of the dollar, and/or of the currencies of other rich countries allied with the U.S. [noted](https://twitter.com/CamiRusso/status/1570439681107443716), the devs changed the proverbial jet engine mid-flight and did it without a hitch. He suggests dollar-backed stablecoins will be most popular but that, in time, we could see migrants snapping up “stablecoins backed by real estate.” But for this week at least, it is enough for the Ethereum community to take a well-deserved victory lap. Let’s hope the next wave of Ethereum innovation is based around building products that will be truly useful to ordinary people and show them why blockchain is such a great technology in the first place. The top priority should be the exorbitant gas fees that make legacy payment and computer networks look cheap in comparison—Ethereum is never going to catch on if the first time someone tries it, the network dings them for $50 or more in fees. The reaction of the market was decidedly more muted, however, as the price of Ethereum slumped as much as 7% after the merge. The upgrade, known as the Merge, will slash the chain’s carbon emissions by more than 99% and, just as importantly, shows that a rag-tag band of crypto developers can get shit done.

The price stability that prevailed after Ethereum's shift to a more energy-efficient "proof-of-stake" network suddenly evaporated as ether slid 9.1%, ...

CoinDesk is an independent operating subsidiary of [Digital Currency Group](https://dcg.co/), which invests in [cryptocurrencies](https://dcg.co/#digital-assets-portfolio) and blockchain [startups](https://dcg.co/portfolio/). In the weeks before the Merge, bitcoin and ether appeared to be traveling on separate trajectories. [strict set of editorial policies](/ethics/). In total, 12%, or 305, nodes appeared to be recalcitrant, with the transition with the majority from the Geth network. “We expect this volatility for at least the next 24 hours.” Investors should definitely be cautious, as always, and expect volatility in price and narrative," he added. “I think that you wouldn’t have to throw many rocks to find a fund that has a healthy nine-figure position on the merge, long spot short derivatives or something like that," said Abraham Chaibi, co-founder of Dexterity Capital. “ETH peaked at $2,000 one month ago and has seen a sharp drop today once the Merge was deemed successful. [blockchain data](https://twitter.com/ASvanevik/status/1570268736229199872) showing that investors were sending ETH to crypto exchanges in droves – often taken as a sign that holders are getting ready to dump. The [CoinDesk Market Index](https://www.coindesk.com/indices/cmi/) was down about 4%. “We’ve also seen market depth decrease and spreads increase, so that will likely factor into larger price movements.” [quoted on the "Bankless" podcast as saying](https://www.benzinga.com/markets/cryptocurrency/22/07/28238848/vitalik-buterin-the-merge-isnt-priced-in-yet) the Merge was “not going to be priced in pretty much until after it happens.” [According to EtherNodes](https://www.ethernodes.org/merge), 88% of ether nodes were Merge-ready and synced in the moments leading up to the event.

Although the Merge was a huge feat, there are plenty more upgrades planned for the Ethereum blockchain down the road. In July, Vitalik Buterin, co-founder of ...

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Ethereum now spews out less carbon dioxide than a few hundred U.S. households, according to a report.

[help the world transition to cleaner energy](https://www.coindesk.com/layer2/miningweek/2022/03/26/can-crypto-miners-make-the-world-greener/). CoinDesk is an independent operating subsidiary of [Digital Currency Group](https://dcg.co/), which invests in [cryptocurrencies](https://dcg.co/#digital-assets-portfolio) and blockchain [startups](https://dcg.co/portfolio/). The amount of energy guzzled by PoW, which is how [Bitcoin](https://www.coindesk.com/price/bitcoin/) and other blockchains still operate, has come under [extreme scrutiny](https://www.coindesk.com/policy/2022/09/08/crypto-mining-energy-implications-need-further-study-white-house-report-says/) from lawmakers and policymakers around the world. [strict set of editorial policies](/ethics/). Investors barred from buying tokens that run on PoW systems may be able to buy ETH, Ethereum’s native token, after the PoS switch, Bank of America said in a As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of [stock appreciation rights](https://www.investopedia.com/terms/s/sar.asp), which vest over a multi-year period. [report](https://www.coindesk.com/markets/2022/09/12/bank-of-america-says-the-ethereum-blockchains-upgrade-may-lead-to-greater-institutional-adoption-of-ether/) this week. The decrease means the network now spews out less carbon dioxide (CO2) than a few hundred U.S. Bitcoin still uses PoW, drawing criticism from environmentalists and policymakers. household uses in 6.7 days, according to [crypto miners](https://www.coindesk.com/policy/2022/09/12/white-house-crypto-mining-report-draws-praise-from-advocates-and-critics-alike/) from running Ethereum, doing away with a system called [proof-of-work](https://www.coindesk.com/learn/2020/12/16/what-is-proof-of-work/) (PoW) in favor of a [proof-of-stake](https://www.coindesk.com/learn/2020/12/30/what-is-proof-of-stake/) (PoS) mechanism, which doesn't require vast server farms running complex computations and thus consumes a lot of electricity. [Ethereum](https://www.coindesk.com/price/ethereum/)’s energy use by 99.988% and carbon-dioxide emissions by 99.992%.

Ethereum's merge, which transitioned to an eco-friendly consensus model, was successfully completed overnight. A report from the Crypto Carbon Ratings ...

It’s just not tied to Ethereum itself anymore, which should help the network shed the [environmental concerns](https://decrypt.co/109623/ethereum-merge-ends-environmental-debate-nfts) that will continue to be linked to Bitcoin and other such cryptocurrencies. [Digiconomist](https://digiconomist.net/ethereum-energy-consumption), a site from noted crypto critic Alex de Vries. Whether ETHW retains long-term interest remains to be seen, but in the short term, some former Ethereum miners hope to profit in that space. According to an initial report out this morning, [Ethereum](https://decrypt.co/resources/what-is-ethereum-quickly-explained-four-minute-guide)’s energy needs and carbon footprint have both fallen even more than anticipated. As a result, Ethereum’s estimated annual CO2 emissions have dropped from over 11 million tons to just under 870—less than the combined total of 100 average American homes, It also suggests the blockchain's carbon footprint has dropped by just over 99.99% as well.

Until now, both ethereum and bitcoin were running on proof-of-work, which requires high-powered computers to verify transactions and “mine” new coins across a ...

[Sign up](https://www.cnn.com/specials/nightcap?source=article) and you'll get all of this, plus some other funny stuff we liked on the internet, in your inbox every night. The unions have agreed not to strike while votes are being tallied, which means the negotiators have bought themselves a couple of weeks. Even though it's technically possible for bitcoin to alter its infrastructure, as ethereum just demonstrated, "bitcoiners view proof-of-work as a superior way of securing the network." In short, the merge would put the core infrastructure of ethereum on a more environmentally sustainable path, reducing its carbon footprint by 99%, according to the nonprofit behind the network. The workers who operate America's freight trains were at their breaking point, often working 14 days in a row, with no sick days (paid or unpaid) and constant fear of termination if they miss work for medical reasons. Similarly, workers at Kellogg continued to strike in December after negotiators thought they'd reached a settlement. (OK, most nights — we believe in a four-day work week around here.) Here's the deal: It's been a rough year for cryptocurrencies and their legions of fans. Per Biden's statement: "These rail workers will get better pay, improved working conditions, and peace of mind around their health care costs — all hard-earned." - (Ugh, I realize that still might sound like sci-fi, but the longer explanation would seriously put everyone to sleep. - But medical time off won't be paid. Bitcoin, by far the largest token, has fallen roughly 70% from its high nearly a year ago.

While most have celebrated with the Ethereum team following the successful Merge, others have expressed skepticism about the future of the cryptocurrency.

The account shared that “Ethereum is essentially catching up to Cardano.” Hats off to the team for executing with the world watching. All the value and control gets scooped up by the people at the top. [Community celebrates the Merge by dropping ETH-inspired art and music](https://cointelegraph.com/news/community-celebrates-the-merge-by-dropping-eth-inspired-art-and-music) 15 at 06:42:42 UTC, the last Ethereum block using the old proof-of-work consensus mechanism was mined. By design. [reduce the energy consumption](https://cointelegraph.com/news/ethereum-co-founder-vitalik-buterin-celebrates-the-merge-dream-for-years) of the entire network by 99.95%. [congratulations](https://twitter.com/NischalShetty/status/1570308139920269312), remarking that Ethereum is the “OG of smart contracts” and has played a massive role in building the Web3 ecosystem. Replacing it is an energy-efficient proof-of-stake consensus mechanism. [have been thrilled](https://cointelegraph.com/news/community-celebrates-the-merge-by-dropping-eth-inspired-art-and-music) by the positive impact it will have on the environment and thus, crypto’s reputation. [called](https://twitter.com/bgarlinghouse/status/1570334032587620354) it a “truly incredible technological feat,” and NFT company Yuga Labs told its followers this was a “big step” in scaling Ethereum to its “first billion users.” [following the successful Merge](https://cointelegraph.com/news/breaking-historic-day-for-crypto-as-ethereum-merge-to-proof-of-stake-occurs).

The shift to proof-of-stake has analysts exploring its impact on the blockchain's vaunted decentralization.

Some critics have described the merge as a [move toward centralization](https://twitter.com/ClassicPharaohs/status/1570194214256005126). The fact that Bitcoin is “sufficiently decentralized” is the main reason why it has remained [outside of the crosshairs](https://decrypt.co/103926/sec-chair-gensler-bitcoin-not-security-what-about-ethereum) of U.S. [key objective](https://ethereum.org/en/web3/) of crypto and Web3. Further, dominant parties could be pressured to censor transactions on the blockchain—although Coinbase CEO Brian Armstrong has said that [such a scenario](https://decrypt.co/107700/coinbase-ceo-wed-shut-down-ethereum-staking-if-threatened-by-regulators) would prompt his company to get out of the staking business. "It is doable by anyone with a sufficiently good computer, electricity, and internet," he said. The remaining stakers, classified as “other,” have 3.65 million ETH (26.5%).

Welcome to Bloomberg Crypto, our twice-weekly look at Bitcoin, blockchain and more. In today's edition, Emily Nicolle discusses the potential implications ...