Ethereum successfully executes “the merge”, ushering in the proof-of-stake era

This upgrade has forever changed the way ETH is created and how transactions on the Ethereum network are validated. Up until the time of the merger, ETH was generated by “mining,” an energy-intensive process by which individuals directed huge amounts of computing power into hard-to-solve puzzles.

We merged! What a surreal feeling after working on the beacon chain for two years and the merge for two years. This was the most complex project I’ve ever participated and it wouldn’t have been possible without all the brilliant minds. History was made today! Congrats! 🐼

– terence.eth @ ethberlin (@terencechain) September 15, 2022

Proof of stake is a mechanism by which new ETH is instead generated by individuals and entities that commit to providing large amounts of pre-existing ETH. The transition is expected to be faster, more scalable, and over 99% more environmentally friendly.

The event was triggered when Ethereum’s main network reached the “terminal total difficulty“, i.e. the predetermined point at which ETH mining became effectively impossible, and the network automatically began to switch to a consensus mechanism “proof-of-stake“.

Within twelve minutes, the world, as well as Ethereum’s core developers, waited with bated breath to see if the network would begin offering and approving new blocks of proof-of-stake transactions.

Justified now, waiting on finalization – about 6 mins out assuming network conditions stay the same…! https://t.co/kF5AOrBg85

– Tim Beiko | timbeiko.eth 🐼 (@TimBeiko) September 15, 2022

During those twelve minutes, the transition went smoothly. The Ethereum network did not miss a single “slot” of 12-second block proposal, and after 12 minutes and 48 seconds, which corresponds to two epochs (periods of 32 slots each), it successfully reached finality – the key reference point for determining whether the merger was successful.

Meanwhile, as a precautionary measure, major crypto-currency exchanges, including Binance, FTX, Coinbase and Kraken, have temporarily halted Ethereum-related token exchanges, including ETH. Ethereum-impacted trading is expected to resume on these platforms shortly.

Ethereum’s lead developers celebrated the development – the culmination of years of arduous testing and preparation – in the moments that followed.

WE FUCKING MERGED

– prestonvanloon.eth (@preston_vanloon) September 15, 2022

The seamless execution of the merger represents a historic technical feat that some have compared to changing the engine of a rocket in mid-flight. The Ethereum network currently supports tens of billions of dollars of digital assets, applications and decentralized financial systems (DeFi), none of which appear to have been affected by the network’s transition to proof-of-stake.

In the moments after the merger was finalized, ETH’s price fell 0.4%.