The Merge: Election Year

Ethereum, the second-largest blockchain in the world, began a massive software upgrade yesterday that’s known to the community as “the Merge.”

☝️ First things first: Ethereum technically means something different than “ether,” the second-biggest cryptocurrency by market cap, though the two terms are often (mistakenly) used interchangeably.

• Ethereum is the blockchain platform that facilitates all of ether’s transactions. It’s also the base upon which thousands of other crypto tokens and decentralized apps have been built.

📰🪙 Now, back to the news... At its most basic level, the Merge will transition Ethereum – and all crypto projects under its umbrella – away from a system called “proof-of-work” and towards a new process called “proof-of-stake,” reducing the blockchain’s energy consumption by 99+% in the process.

• The Merge is expected to be completed at some point around September 13-16, resulting in a blockchain system that’s sometimes referred to as ‘Ethereum 2.0’ – though not officially.

⏩ Driving the move… A desire to reduce Ethereum’s negative environmental impact. In its pre-Merge form, a single transaction on the blockchain consumed roughly as much power as the average US household does during a full workweek, per Fortune.

📉 Zoom out: After falling nearly 60% over the first six months of this year, the price of ether is about the same level it was at the end of July (~$1,600 per coin).