“The Merge”: successful transition for the Ethereum blockchain

“And we have finalized! » Vitalik Buterin did not hide his satisfaction, Thursday, September 15. The co-founder of the “block chain” (blockchain) Ethereum welcomed, on the social network Twitter, a particularly important technical change that its platform has just made, supposed to make it more efficient and less energy-intensive. “All those who contributed to make the Merge a success [“la Fusion”] can feel very proud today”he added.

Nicknamed “The Merge”, this major technical change consists of modifying the mode of validation of operations on the Ethereum blockchain, a huge tamper-proof computer ledger that serves as the basis for billions of dollars in operations. The community behind this blockchain, led by Vitalik Buterin, has indeed decided to move towards a system considered to be less energy-consuming: from a protocol based on “proof of work” (proof-of-work), Ethereum has switched to another protocol based on “proof of stake” (proof-of-stake).

Read our explanations: what is the transition of Ethereum from “proof-of-work” to “proof-of-stake”

“No one has triggered an alert”

The stakes are high for the sector. Admittedly, ether, the cryptocurrency backed by Ethereum, represents only around 20% of the total value of existing virtual currencies, which is half that of bitcoin (40%), the most widely used cryptocurrency in the world. But Ethereum has a much wider scope of applications than its competitor, since it serves as a support for multiple uses, such as the production of NFTs (non-fungible token, digital certificates), games and applications. Making such a technical transition when many services are based on this blockchain was therefore risky: the operation has often been compared to replacing the engine of an airplane in mid-flight.

Read also: Crypto-art: more than 100 million dollars of NFTs stolen in one year

One after another, the major global cryptocurrency exchanges – BinanceCoinbase, Bitfinex, Bitpanda… –, which had suspended Ethereum-based exchanges during the transition, announced that they were resuming operations, a sign of their confidence. The price of ether was, moreover, stable at midday, down slightly around 1,595 euros for 1 ether.

“A priori, everything went well, no one triggered an alert” in the small world of cryptocurrencies, which communicates in real time on social networks, explained to Agence France-Presse (AFP) Manuel Valente, of the French platform Coinhouse. “Decentralized finance applications”which make it possible to borrow and lend cryptocurrencies and which are the spearhead of Ethereum, “working properly”he added.

What future for “minors”?

One of the points to watch, however, in the coming weeks is the attitude of former Ethereum “miners”, whose task until now consisted of validating transactions by solving very complex calculations, which required powerful computers. . With the proof-of-stake protocol, validating transactions no longer requires performing calculations (called “the work”) but rather proving that one owns a share of the cryptocurrency in question (“the stake”) . All those expensive machines that miners have invested in over the years are now useless.

A small minority of them, opposed to the moult of Ethereum, therefore decided to continue working in the old way. Two different validation systems therefore now operate in parallel, resulting in a forkeda branch, as it is called in the jargon of the crypto-asset world: the large register compiling all the transactions of the Ethereum blockchain is duplicated.

This type of schism has already happened in the world of cryptocurrencies. If continued, such a duplication would not call into question the overall credibility of the new Ethereum, but could still cause a number of technical problems, confuse ether holders and create risks of attacks. or embezzlement.

Read also: At the Crypto Policy Symposium, the skeptics of the cryptoeconomics come into resistance

The World with AFP

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“The Merge”: successful transition for the Ethereum blockchain

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