Get Ready For the Surge, the Verge, the Purge and the Splurge
This year’s watershed moment in the crypto world — the Merge — took place last week, and there was nary a hitch. That puts Ethereum another step closer to its goal of becoming the go-to place for everyday transactions, from finance to social activism.
“Happy merge all,” the founder of Ethereum, Vitalik Buterin, tweeted after the watershed moment happened. “This is a big moment for the Ethereum ecosystem.“
The transition instantly reduced energy consumption of the Ethereum blockchain by 99.95%. The Merge accomplished this environmentally friendly feat by eliminating the need for transactions processed by miners to use energy-guzzling computers competing for the right to solve complex math problems -- a signature aspect of the original Ethereum blockchain. In its place, the Merge swapped in a proof-of-stake system that requires users to “stake,” or deposit, a minimum 32 Ether (currently about $43,000 USD) to validate transactions on the blockchain.
The Ethereum community’s aim, ultimately, is to make its blockchain the world’s computer, an open platform for anyone who wants to build applications, power tokens, run decentralized autonomous organizations (DAOs) or create digital assets known as Non-Fungible Tokens (NFTs). The Merge is the first of five planned upgrades that developers are working on right now. Completion -- which is not guaranteed -- could take months, if not years.
“It’s a long and complicated transition,” said Buterin in a July speech, estimating that the blockchain would only be 55% transitioned after the Merge. “But we’re getting close to the second half of this big long vision."
Now that the Merge is done, get ready for — as Buterin calls them — the Surge, Verge, Purge and Splurge. Up next: sharding, a concept in computer science that means the database is split to spread the data load. Sharding could happen as early as next year, making the Ethereum blockchain faster, easier, and potentially cheaper to use, according to the non-profit Ethereum Foundation.
“We're trying to have as much activity on the Internet settled on Ethereum as possible,” said Justin Drake, a researcher at the foundation. “We need the best-in-class security and enough throughput."
Not everyone shares the vision.
The Merge aside, “everything else about crypto is still bad,” crypto critic David Gerard tweeted on the day the Merge happened. "It’s quilted from scams, its only use case is dodging the law, the politics are horrible and the users are crooks - but it won't use a country's worth of electricity.”
Drake counters that Gerard’s comments are “lazy criticism that’s lacking imagination.”
According to Drake, Ethereum critics are ignoring the big picture: While scams have plagued many disruptive technologies, the blockchain is also home to a growing number of important and credible projects. Also, he notes, Ethereum is just seven years old. As more applications are built on the blockchain, he says, the more useful it will become.
Eventually, Buterin predicts that it will be a potent force for raising money for mission-oriented ventures, including social activism, and for creating domain names for the decentralized world. Domain names (such as, hypothetically, Vitalik.eth) may be useful for facilitating secure transactions with third parties because they are less susceptible to mistakes and scams than long wallet addresses.
Right now, Ethereum is the No. 2 cryptocurrency behind bitcoin, with market caps of $152.2 billion and $353.3 billion, respectively, according to CoinMarketCap.