The “difficulty Bomb” will slow down Ethereum’s current network. Ethereum developers hope to quickly transition to proof-of-stake, which would eliminate the need to update the bomb.
Do not get too excited about Ethereum’s move towards proof of stake. However, it could be on the horizon for this summer.
Preston Van Loon, an Ethereum core developer, told a panel today at the Permissionless conference that there is momentum for finalizing the move within the next three months.
Van Loon stated, “As far we know, if all goes according to plan, August–it just seems sensible.” “If we don’t have to move [the trouble bomb], then let’s do it as quickly as possible.”
Justin Drake from Ethereum Foundation was also present on the panel. According to a Tweet of event co-host Bankless, he noted that there is a strong desire to make it happen before August’s difficulty bomb.
Van Loon and Drake were talking about an event called The Merge. This is when the Ethereum blockchain merges into the proof-of stake beacon chain. This will change the focus of the network away from mining, where people use powerful computers to earn ETH, to staking. Ethereum holders can deposit their ETH and receive rewards.
August is not a random date. The Ethereum core developers made a decision not to upgrade the network in May to avoid the “difficulty Bomb”, which would soon cause the network to go downhill. This is an element embedded in the blockchain that slows down the network. It was designed to encourage developers to use proof of stake to make it easier for miners to continue on the proof-of work chain following the switch. The Merge is still in testing, and core developers decided not to distract their attention from it this month. The completion of the project would eliminate the need to defuse this difficulty bomb.
Proof of work and proof-of-stake help to keep the network secure, decentralized and reliable. However, proof of stake offers several additional benefits. Proof-of-stake consensus will allow for easier participation in the running of the network, allowing for further decentralization and security.
The real reason people are eagerly awaiting The Merge is that it will reduce the issuance of ETH by approximately 90%. The price should rise if there is less ETH in circulation. According to CoinMarketCap data, 1 Ethereum is currently worth $2,000 The Merge, according to the most optimistic Ethereum bulls, could bring back the asset’s original high of $4891, which was set in November 2021.
It has taken a while to get proof of stake. Technically, it’s been online since December 2020. Phase 0 of “Ethereum 2.0” was completed. This suite of upgrades was designed to increase the network’s security and scale.
That was the beacon chain, a proof-of stake network you can’t do much with. People have been able to lock their ETH in it so far with the promise future payouts. This will be changed by merging the existing chain and the beacon chain.
This is not the final major upgrade for Ethereum. Sharding is a method to split up the network into multiple chains. The Ethereum Foundation explains that validators will only need to store/run data specific to the shard they are validating and not the entire network (as is the case today). This allows for faster processing and greatly reduces hardware requirements.
Ethereum users would not mind if The Merge was also faster.