Last week on CoinSnacks, we covered The Ethereum Merge and all the beautiful things it will do for investors, users, and developers.
Well, if you thought that was the end of the story, boy, you are in for a treat.
Last Thursday, July 21st, Ethereum founder Vitalik unveiled the updated Ethereum roadmap during a talk at the Ethereum Community Conference (EthCC).
It turns out that The Merge is not the endgame for Ethereum but just the first of 5 catchy named phases that, when completed, should enable Ethereum to handle 100,000 transactions per second (TPS).
Let’s talk about what each phase entails and why they matter.
The Merge, which we discussed last week, is the first phase, and it’s on everybody’s mind right now. During The Merge, the current proof-of-work execution layer merges with (hence, The Merge) the new proof-of-stake execution layer Beacon Chain.
This has a few significant benefits for Ethereum. We will cover the big ones quickly, but if you want an in-depth explanation, seriously, go check out last week’s article.
The main benefit of The Merge is that Ethereum issuance is significantly reduced. Combine this change with the EIP-1559 burn mechanism and ETH is likely becomes deflationary. A deflationary ETH is an ETH with significant price potential.
The other main benefit of The Merge is that the move to proof-of-stake cuts power usage by ~99%. This should satisfy those worried about crypto’s adverse effects on the environment.
The Merge is scheduled to happen on or around September 19th, 2022.
Poor transaction speeds and high gas fees have proven to be a thorn in Ethereum’s effort to scale. The Surge, phase two of the plan, is the first step to remedying this issue.
In The Surge, we finally see the implementation of the frequently teased sharding mechanism.
Sharding splits a database horizontally to spread the load. Basically, it makes data smaller and easier to congest. Combined with Layer-2 rollups, sharding should help massively scale Ethereum, which has been a problem for Ethereum in the past.
The plan is for sharding to come out sometime in 2023.
Decentralization and security have always been central to Ethereum. The Verge helps take it to the next level.
The Verge introduces what is known as “verkle trees” and “stateless clients” to Ethereum. There’s a lot of computer science mumbo jumbo needed to understand them, and it’s really not that relevant for the average Joe, so we aren’t going to waste your time explaining it right now.
All you need to know is that verkle trees and stateless clients make it much easier to run a validator node, and the more nodes a network has, the more decentralized and secure it is.
Just like the movie, The Purge is all about destruction.
The goal of The Purge is to delete unnecessary old history from the network to simplify Ethereum further and reduce the hard drive space needed to run a node. The ultimate hope is that nodes will no longer need to store the history of the blockchain after The Purge, making it much easier to run a node.
The final stage of the plan is The Splurge.
The Splurge is the final cleanup phase. Described by Vitalik as “the rest of the fun stuff,” The Splurge is where Ethereum can upgrade as needed to support the previous four phases.
Although most of these phases are still a ways away, this story is worth following over the coming months and years.
Never before has a blockchain sought such an ambitious upgrade plan. If everything goes according to plan, Ethereum has a chance to be the first blockchain to solve the blockchain trilemma – successfully balancing decentralization, security, and scalability.
It’s an exciting time to be an Ethereum investor.