The Ethereum merge explained: What is it? When is it?

(Image credit: Future)

The Ethereum merge is poised to be one of the momentous events in cryptocurrency history. Why? The Ethereum blockchain, the protocol that underpins many non-fungible tokens (NFTs), is in hot water for being an energy-guzzling network — and the founders are determined to do something about that.

As such, later this year, Ethereum is ditching its former energy-intensive system and adopting a more environmentally friendly method. This is a huge win for atmosphere's health, and green-focused advocates are thrilled, however, not everyone is happy about the merge — you'll see why.

The Ethereum merge explained

The Ethereum merge is the blockchain's move toward a less energy-intensive network called proof-of-stake. As of this writing, Ethereum is running on a proof-of-work protocol, a method that Bitcoin follows, too. Before I can dive into the meaning of proof-of-work, let me briefly explain how the Ethereum blockchain works.


Ethereum (Image credit: Snappa)

Long story short, Ethereum relies on the public's hardware resources to validate transactions on the blockchain. Anyone can participate in keeping Ethereum engine running — even you. The network will reward you in ETH (Ethereum's native coin) for it. As a participant of the Ethereum network (you'd be called a "miner"), you're competing against other miners' hardware to rapidly solve ultra-difficult equations to win ETH rewards.

Unfortunately, this incentivizes miners to purchase or construct beastly, energy-guzzling machines to outpace their rivals. This is partly why GPUs have been flying off the shelves, leaving nothing for gamers who want to play their favorite triple-A titles. Jeopardizing the environment, mining farms — yes, you read correctly — farms are cropping up all around the world with innumerable, high-powered machines running 24/7 to generate ETH income.

crypto mining farm

crypto mining farm (Image credit: Getty/Alvarez)

It's gotten out of hand, so the Ethereum mainnet is switching to proof-of-stake, which is much less taxing on the environment. What is proof-of-stake? Well, instead of rewarding miners who have the biggest and baddest hardware, proof-of-stake praises those who have the largest ETH holdings. If you wanted to participate in the Ethereum network under proof-of-stake (you'd be called a "staker"), you'd need to lock away your ETH for some time (you can't sell it, move it, use it, etc.). However, you'd earn rewards for staking your ETH.

The more ETH you have staked, the greater your chances will be at winning ETH. Yes, this method is making the rich richer, but at least we're not killing Earth, right?

Ethereum merge date

You may be wondering, "When is the Ethereum merge?" The Ethereum merge is set to launch some time between Sept. 10 and Sept. 20, according to an Ethereum foundation blog post.

Ethereum researcher Carl Beekhuizen says the network's energy usage will decrease by 99.95% after the merge, adding that ETH 2.0 will no longer expend "a country's worth of energy."

Ethereum POS

Ethereum proof-of-stake (PoS) vs. Ethereum proof-of-work (PoW) (Image credit: Ethereum Foundation)

"In total, a Proof-of-Stake Ethereum [..] consumes something on the order of 2.62 megawatt," Beekhuizen said. "This is not on the scale of countries, provinces, or even cities, but that of a small town (around 2100 American homes)."

Why some are angered about the Ethereum merge

If your sole form of income depended on Ethereum's proof-of-work protocol, wouldn't you be pissed, too? As you can imagine, Ethereum miners are peeved about the forthcoming merge.

Interestingly enough, as a way of sticking their middle fingers up to the merge, a group of miners launched a campaign to fork the Ethereum network and create a still-minable form of ETH called "ETHW," according to Decrypt. 

At first, the token generated a lot of buzz, but a week after the token launched on some crypto exchanges, the momentum faltered. According to CoinMarketCap, the price of the token plummeted from $140 on Aug. 8 to $49 on Aug. 26.

Ethereum core developer Preston Van Loon told Decrypt that ETHW is doomed: "There will not be enough buyers to absorb the constant sell pressure from miners and the currency will tumble to zero." 

Miners are also eyeing Ethereum Classic (we explained how it differs from Ethereum here). They're doing everything they can to ensure that their expensive mining equipment doesn't end up being useless, dust-collecting space consumers. There is a silver lining for them, though; there are plenty of other proof-of-work cryptocurrencies they can kill the environment with.

Kimberly Gedeon

Kimberly Gedeon, holding a Master's degree in International Journalism, launched her career as a journalist for MadameNoire's business beat in 2013. She loved translating stuffy stories about the economy, personal finance and investing into digestible, easy-to-understand, entertaining stories for young women of color. During her time on the business beat, she discovered her passion for tech as she dove into articles about tech entrepreneurship, the Consumer Electronics Show (CES) and the latest tablets. After eight years of freelancing, dabbling in a myriad of beats, she's finally found a home at Laptop Mag that accepts her as the crypto-addicted, virtual reality-loving, investing-focused, tech-fascinated nerd she is. Woot!