To transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), Ethereum finalized the third (and last) testnet merge, Goerli. In the cryptocurrency world, a testnet is a test network designed to experiment with the different improvements in the blockchain without causing any harm to the main network.
Through the transition to the PoS model, the Ethereum blockchain is expected to achieve greater scalability and improve its environmental sustainability by eliminating the energy-intensive PoW crypto mining process. In other words, PoS will speed up crypto mining, which is a process of creating new coins and verifying crypto transactions.
Following the news, Ether, Ethereum's native token, jumped 14% in 24 hours.
- Ethereum is closer to switching from Proof-of-Work (PoW) to Proof-of-Stake (PoS) model.
- The network's third and final testnet, Goerli, successfully transitioned to PoS on August 11, 2022.
- Ether rose 14% in 24 hours following news of the successful final merge.
Ethereum Moves Closer to PoS
Ethereum will move from a power-hungry proof-of-work system to a more eco-friendly proof-of-stake system. This switch is known as the "Merge," and the tentative Ethereum Merge date is set for September 19, 2022. The transition is expected to increase the network's scalability and make it 99% more environmentally friendly.
The Goerli testnet merge was the final litmus test for Ethereum before it transitions to the proof-of-stake consensus mechanism. The successful rehearsal has generated excitement in the Ethereum community, especially among key developers like Vitalik Buterin. Prior to this merge, Ropsten and Sepolia, the two mergers before this one, were largely successful. Both events took place by earlier this year in June and July.
What Investors Will Get From Merge?
After switching to the PoS model, Ethereum will be more scalable. Its transaction speed will be enhanced, and its energy consumption will also be reduced. As a result, investors will not have to wait long for their transactions to be verified and will not have to pay a high gas fee.
The Bottom Line
With three successful testnet merges, the crypto community has gained confidence that the transition to mainnet will be successful. However, it remains to be seen whether a smooth transition to PoS will put an end to crypto winter.