Ethereum, the decentralised and open-source blockchain, has successfully completed the merging of its Ropsten proof-of-work (POW) execution layer with the Beacon Chain proof-of-stake (POS) consensus chain. This marked a positive step towards Ethereum’s eventual merge set to take place later this year. The Ropsten merge is one of the last testnets slated to be carried out before the final merge takes place on the Ethereum mainnet. We can understand if all these feel too complex for a regular investor. In this article, we will try and explain what the upcoming merge is all about and why it is important.


Ethereum merge: What is POW? What is POS?


As per CoinDesk, Ethereum is currently based on a POW mechanism. Here, crypto miners use power-intensive rigs to discover new blocks and add them to a blockchain. In doing so, they earn the newly issues Ether (ETH) token and also a part of the transaction fees and tips.


On POW, validators will be in charge of adding new blocks. Validators who have staked the required 32 ETH tokens will be eligible for mining.


Ethereum merge: Why is it needed?


The primary reason for the Ethereum merge is to switch over to a technology that’s not energy-intensive. It’s a known fact that crypto mining consumes a lot of electricity as it requires powerful PCs running round-the-clock to solve complex mathematical calculations to identify new blocks. The Ethereum merge will reduce energy consumption by 98 percent.


While the update was earlier called Ethereum 2.0 or ETH2, the Ethereum foundation now officially calls it “Ethereum Merge,” as reported by NextAdvisor in partnership with TIME.


Ethereum merge: What does it mean for investors?


The merge is not only expected to offer better stability and security on transactions, but it could also considerably speed up processing. Add to that the major reduction in energy consumption, and you can see why the merge makes sense.


The merge may also lead to overall price growth for all related altcoins.


Investors don’t need to worry much, as their holdings will remain the same, even after the merge takes place. They can, however, decide to help out by agreeing to test the upgrades or even stake ETH tokens to participate in the process.


Ethereum price today


At the time of writing, ETH price stood at $1,799, as per CoinMarketCap data, registering a dip of just 0.23 percent in the last 24 hours.