Ethereum Goes Green

Ethereum Goes Green

A short summary from Vitalik Buterin talk at ETH Toronto about the future of Ethereum as it prepares to move to proof-of-stake.

By Ev Tchebotarev

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Just a few days after I attended ETH Toronto to hear Vitalik Buterin, co-founder and ideological leader of Ethereum, speak on the future of the blockchain, the organization behind developing the code announced the final “day” of the upcoming merge — September 15.

What does it all mean? Well, the most popular blockchain for photographers and artists is going green. With the merge, the energy consumption will immediately fall by over 99%. And that’s a big deal.

However, for different groups of people, the merge will mean different things, so I’ll mostly focus on artists and photographers while touching on other aspects very briefly.

The worst news is for the miners — their equipment will become unnecessary, so they are likely to transition to mining other coins that are still running on proof-of-work (requiring number crunching to randomly guess the correct piece of code to validate a transaction). Some started selling thousands of GPUs ahead of the merge.

Instead, with a proof-of-stake model, instead of buying GPUs (need $$$) and paying for electricity (need $$$), you simply need the money itself. Ethereum is likely to be the most robust proof of stake blockchain, as it currently has an order of magnitude more participants (called validators) than any other chain — over 415,000! Massive-Ethereum-Supply-Shock.webp

Gas fees

The merge, while lowering the energy consumption and moving to using money as a validator (what is known as a proof-of-stake), will not reduce the gas fees. However, it opens up Ethereum to a lot of upgrades down the line that should be able to do that. For now, we’ll be stuck with ~19 transactions a second, and gas fees that can still bite when there’s a demand surge.

Wallet experience

A potential improvement to creators is that the Ethereum merge opens up is to make wallets and other “light clients” more reliable. Currently many of the wallets rely not on the actual blockchain data, but rather on APIs, often coming from sources that are unreliable, slow, or incomplete. After the merge, these light clients, like wallets or various dApps (decentralized applications) will be able to verify whether transaction really occurred.

Scaling

Unfortunately the merge does nothing to scaling (yet), so don’t expect instant confirmations or near-zero gas fees. However, the blocks on Ethereum will move from being confirmed roughly every 13 seconds (that timing is currently variable and consequently can affect gas fees and gas fee estimates) to exactly 12 seconds, potentially allowing lower priority transactions (like minting NFTs) to go in the “cheaper” portion of the block, while leaving space for DeFi (decentralized finance) at the end of the block, in the “expensive” region.

Controversy

One theoretical controversy is that since Ethereum is a public project, anyone can make a fork — a copy of the chain and make it their own (or just change the rules if others would agree). With the upcoming merge, there are miners who propose to keep the proof-of-work chain (ETH POW), meaning that at the merge, forks can be created. Since a fork is created with all the preceding data, any 1/1 photography theoretically becomes 1/2 (it starts to exist on two or more forked chains). The forked chains are unlikely to become big or even to survive, but arguing theoretically, the ETH POW is the “original” chain on which all of our NFTs are minted, so a merge is actually creating a new chain, that is not original. Lots to process for sure!

What should photographers do?

Luckily, any regular user of the Ethereum blockchain doesn’t need to do anything. The merge will happen, NFTs will remain there, most popular clients (wallets like Metamask, etc) will update prior to the merge to support any changes, and we can all enjoy more eco-friendly Ethereum. If you are using some unpopular or rare clients, the developers might be slower to update, so it is best to confirm post-merge that everything is working fine (ie by checking the app website or social media). For those who are deep into staking, loans, DeFi, etc. — DYOR and get ready.

Final note

The actual merge is not set on a specific date. Developers set it for a hash rate difficulty, so the official merge “date” is Terminal Total Difficulty (TTD) of 58750000000000000000000, which is estimated to happen on September 15th, however it can fluctuate or change rapidly if miners will be pulling out of Ethereum network.

Update: The merge was completed successfully. Welcome to the post proof-of-work Ethereum future!