Ethereum’s coming ‘Merge’ could make or break crypto

livemint.com:

Sometime later this year, Ethereum is set to make the biggest change in its near-decade history, an event that’s certain to ripple through the entire ecosystem of cryptocurrencies and digital assets. Think of it this way: The most important commercial highway in crypto is about to be completely repaved.

Ethereum is essentially computer software that uses so-called blockchain technology to provide a digital ledger for recording transactions. It’s become the most popular basis for a growing array of commercial crypto assets and applications, including lending products, nonfungible tokens (NFTs), as well as its native token, Ether. Ethereum isn’t owned by anyone but built and refined by a community of developers, and it runs on a network of data centers throughout the world. These data centers operate as “miners" on the network, ordering transactions that are posted to the digital ledger. In return they get paid in Ether. This system has been dubbed “proof of work."

Developers who work on refining the Ethereum software roll out periodic upgrades, but none has been as major as the one expected this year. Named “the Merge," it will replace miners with so-called stakers. Miners order transactions by solving complex calculations using millions of powerful servers—a system that’s been criticized for its heavy use of electricity. Stakers, by contrast, will order transactions by putting up their own Ether on a new system, which has been in testing since December 2020. People can already use their digital wallets to stake Ether on this test system, called the Beacon Chain; after the Merge they will start to be selected at random to become what are known as validators, ordering transactions on the Ethereum digital ledger into