The Ethereum Merge

 Now you might have seen a lot of articles lately giving out information on the Ethereum Merge which is going to happen on the 14/15th of September 2022. If you are still confused about what this is or if is it going to affect you, then this post is especially for you.

The joining of Ethereum's Proof of Stake Beacon Chain to Ethereum's Mainnet to transition the Ethereum Blockchain off the Proof of Work legacy 



What is the Ethereum Mainnet and the Ethereum Blockchain - Ethereum Mainnet is a decentralized platform for building tech and Mainnet is the primary public Ethereum production blockchain, where actual-value transactions occur on the distributed ledger. Apps and tech get developed over this blockchain whose further transactions are facilitated and maintained by Ethereum.

What was the Proof of Work - The earlier mathematical concept of solving a problem to access information, which was used by cryptocurrencies and other decentralized platforms by implying the SHA-256 Alogorthim is called Proof of Work. It basically acts as a lock with 2 keys, one is publically available, and the other is with the transactions. 

Eg: Proof of work requires a computer to randomly engage in hashing functions until it arrives at the output with the correct minimum amount of leading zeroes. For example, the hash for block #660000, mined on Dec. 4, 2020 is 00000000000000000008eddcaf078f12c69a439dde30dbb5aac3d9d94e9c18f6. The block reward for that successful hash was 6.25 BTC.

That block will always contain 745 transactions involving just over 1,666 bitcoins, as well as the header of the previous block. If somebody tried to change a transaction amount by even 0.000001 bitcoin, the resultant hash would be unrecognizable, and the network would reject the fraud attempt.

What is the Proof of Stake -  The owners offer their coins as collateral for the chance to validate blocks. Coin owners with staked coins become "validators."

Validators are then selected randomly to "mine," or validate the block. This system randomizes who gets to "mine" rather than using a competition-based mechanism like proof-of-work.

To become a validator, a coin owner must "stake" a specific amount of coins. For instance, Ethereum will require 32 ETH to be staked before a user can become a validator. Blocks are validated by more than one validator, and when a specific number of the validators verify that the block is accurate, it is finalized and closed.

Different proof-of-stake mechanisms may use different methods for validating blocks-when Ethereum transitions to PoS, it will use shards for transaction submissions. A validator will verify the transactions and add them to a shard block, which requires at least 128 validators to attest to. Once shards are validated and block created, two-thirds of the validators must agree that the transaction is valid, then the block is closed.



What is the Beacon Chain - The Beacon Chain is the controller of the Ethereum PoS network, managing the entire process of the PoS protocol and coordinating parallel chains (shards). 

What about those who don't own 32 ETH - Those who don't own 32 Ether or do not wish to run a validator node but wish to stake Ether can still do so by joining a staking pool. A staking pool combines the deposits of multiple individuals to stake the required 32 ETH for an Ethereum validator node. The block rewards from that node are then shared with the staking pool in proportion to the deposited ETH per individual account.

Some Doubts which are related - 

Security - 

1) Long pronounced as a threat for cryptocurrency fans, the 51% attack is a concern when PoS is used, but it is very unlikely. A 51% attack is when someone controls 51% of a cryptocurrency and uses that majority to alter the blockchain. In PoS, a group or individual would have to own 51% of the staked cryptocurrency. It is not only very expensive to have 51% of the staked cryptocurrency—staked currency is collateral for the privilege to "mine." The miner(s) that attempt to revert a block through a 51% attack would lose all of their staked coins. This creates an incentive for miners to act in good faith for the benefit of the cryptocurrency and the network.

2) With the move to PoS, network proposers will be known ahead of time, making them vulnerable to a DoS attack. For example, if a potential attacker is in line to propose one of the next blocks in the blockchain, they can attempt to DoS (a sophisticated networking attack) of the current proposer's node, causing them to lose their slot, and the transactions in that slot can be picked up by the attacker.

3) Staking pools could end up concentrating the number of validator nodes under the influence of centralized entities, which introduces the risk of censorship or governance takeover.

Support Links:

Bloomberg

Official Ethereum Website

Understanding the Merge

In case of suggestions or complaints - 

Email - thetabloid24@gmail.com

Twitter

YouTube


Comments

Post a Comment

Popular posts from this blog

The need for divesifiaction in imports

Image
Topic: International Trade  What is in it for you:  Of the 6,000 plant species humans have eaten over time, the world now mostly eats nine, of which just three —  rice, wheat, and maize —  provide 50% of all calories . The cheaper the food gets, and the lower the imports from the government, the dependence on the above-mentioned crops rises and given with it the dependence on a few select countries . In addition to that, people now have diets with more fats and carbohydrates, and fewer nutrients.  Effects:  The UN estimates soaring costs will push 71 million people globally below the poverty line .  Global crop yields could fall about 30% because of climate change, while food demand is expected to jump 50% in the coming decades, according to United Nations estimates. New opportunities and Future insights:  It will be a long road for any of these initiatives to make a notable difference against the trend for homogenization the industrialized supply chain promotes.  Both the current
Read more

Saudi-US Tensions Simmer

Image
A dispute over oil risks causing irreparable harm to US relations with Saudi Arabia, a crucial partner for Washington in the Middle East. Causes: Nearly two weeks on from a decision by OPEC+ to cut oil production, tensions are escalating. White House National Security Adviser Jake Sullivan fired the most recent salvo, saying the US would consider changes to the security and military support it provides Riyadh. “The president isn’t going to act precipitously,” Sullivan said on Sunday to CNN. Biden will “take his time to consult with members of both parties put over oil risks causing irreparable harm to US relations with Saudi Arabia, a crucial partner for Washington in the Middle East. Effects: In response, officials across the Middle East have denied the supply decrease was politically motivated or a reflection of support for Russia following its invasion of Ukraine. Saudi Defense Minister Khalid Bin Salman said the decision was “due to purely economic reasons,” while ministers from
Read more

The Winter is Coming

The Oil and gas from Russia are exceptionally essential for serving the winter in Europe. After all, even Hitler succumbed to it.  Causes -  The diesel which is used for generating electricity is now available in historically low amounts in North-Western Europe, so much so that by this November, an energy crisis, including blackouts and lack of fuel and electricity for large-scale industries is extremely essential. Adding to his discussion is the large-scale drying up of the Rhine (river in Germany), which supplies and transports all the diesel in Europe. The forecast of this news is so gloomy, that this river which controls trades over 80 billion USD will stop. Effects - Adding to this the already food shortages in Europe due to the war, the survival of the poorest will be challenging in the coming months. The signs of relief from the Western Superpower are low because they are themselves dealing with extreme inflation (CPI peaked at 0.2% in June).  What is in it for you - Well in mac
Read more