On September 15, 2022, Ethereum transitioned to PoS.
After years of planning and development, the ‘merge’ is successful. The impossible has been accomplished.
In this article, we’ll go over a few essential details as a merge ‘Post-op’.
– Energy usage
– GPU and Gaming
– Emissions changes
– PoW forks
– Next steps
There is never a dull moment in our ecosystem. This is especially true at important points in its evolution.
This was demonstrated again this week.
Someone paid ~$50k (30 ETH) in gas to ensure the last Ethereum PoW block was a vanity block NFT. Forever at the end of the PoW chain, on-lookers will now see the following image and text.
‘You make the commitment and nature will respond to that commitment by removing impossible obstacles. Dream the impossible dream and the world will not grind you under, it will lift you up. This is the trick.’
Moments and displays like this are why I love this space so much.
Following the upgrade, Ethereum’s energy usage dropped ~99.5%.
Vitalik estimates that the change to PoS reduced Global energy usage by 0.2%. This makes it one of the most significant de-carbonization events ever.
You can imagine the impact if Bitcoin were to shut down and somehow move away from PoW. I don’t think that should or will ever happen.
The Bitcoin network’s security model is critical for its value proposition. The net carbon impact of Bitcoin’s PoW is not as simple as you might think as well.
Bitcoin mining helps offset carbon emissions and fosters clean energy production and reuse — a focus for a separate article at another time.
Dropping PoW has another positive side effect — cheaper GPUs!
PoW relies on hardware mining, and miners are no longer profitable. Miners are selling their mining hardware in high quantities. As a result, GPU prices are dropping.
Second-hand cards are being sold, and new video card prices are also decreasing.
Good times to be a gamer again (smiley face).
Since the merge, the ETH emissions rate has dropped by about 15x.
That’s 15x less ETH entering the supply since the change from PoW. Emissions will decrease by about 10k ETH/day, with some variance.
Here’s a chart from ultrasound.money showing the current emissions rate and a comparison to a PoW simulation.
Who would have thought copying the Ethereum state would be so complicated?
ETH PoW forks are facing significant technical glitches. As a result, we can conclude that they are currently a failure.
Leading up to the merge, the mining Hashrate dropped quickly.
The prices of ETHPOW and ETHW (alternative fork on Poloniex) crashed shortly after the merge as traders cashed in on their forked coins.
Mining PoW forks does not provide much meaningful financial incentive either.
Even after this historical event, Ethereum is now only 55% complete, according to Vitalik. The following transitions still need to take place:
– The Surge
– The Verge
– The Purge
– The Spurge
Afterward, Ethereum should be able to process 100k tx/sec. These future developments will take several years to complete.
The Cryptocurrency, Web3 ecosystem has come a long way since I first dove into Bitcoin in 2013.
The merge is one of the most impressive live upgrades in the history of computing and engineering.
Congratulations to all core developers and the community at large.
With so much advancement ongoing in an ever-increasing number of ways, this is still only the beginning of our beloved industry.
Glad to be able to share in this journey together. Thank you for reading.
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