The blockchain technology world is eagerly awaiting the Ethereum Merge update.
The long-awaited Ethereum Merge will take place on September 15, 2022 if all goes as planned. This update is closely watched by the entire cryptocurrency community as it is the second most valuable cryptocurrency on the market. With the Ethereum Merge update, there will be a radical change by moving from the Proof-of-Work (PoW) consensus mechanism to the Proof-of-Stake (PoS) mechanism. Well, when the Ethereum Merge happens, the question of how the tokens in the Ethereum blockchain will be affected brings to mind.
First of all, to understand the subject, we need to know what Ethereum Merge is.
What does Ethereum Merge aim at on the Ethereum blockchain… ?
Ethereum Merge; It is an update that will change how crypto transactions are handled on the Ethereum blockchain. As part of this update, in the first phase of the Ethereum 2.0 process, the Beacon Chain, which became operational in 2020, will merge with the Ethereum mainnet. Thus, Ethereum's consensus mechanism will turn from PoW to PoS.
Let's first look at what the concepts of PoW and PoS are...
What is Proof of Work (PoW) … ?
Proof of Work (PoW); It is a security protocol created to prevent information from being manipulated and changed by malicious people within a network or system. Although it came into our lives with the publication of the Bitcoin (BTC) whitepaper in 2008, the concept of Proof of Work was actually first introduced in a 1993 journal article written by Cynthia Dwork and Moni Naor. In 1999, Adam Back invented the Hashcash mechanism to prevent DoS attacks and e-mail spam using the Proof of Work model. Hascash will later become one of the foundations of Bitcoin.
When the person or people named Satoshi Nakamoto came up with the idea of Bitcoin blockchain in 2008, they adopted the Proof of Work consensus algorithm to ensure the decentralization and security of the network. Thus, the Proof of Work algorithm began to be used functionally. After this date, many PoW coins have been released.
What is Proof of Stake (PoS) … ?
Proof of Stake (PoS); It is a consensus mechanism created to ensure the security and sustainability of a blockchain. Developed as an alternative to the Proof of Work (PoW) mechanism, PoS emphasizes capital power, not computing power.
The concept of Proof of Stake was first proposed in 2011 by a Bitcointalk forum user named Quantum Mechanic. According to this proposal, miners in the PoW mechanism are replaced by validators, i.e. coin holders who stake their coins. The purpose of the PoS mechanism is to increase the speed of transactions on the network and reduce transaction costs compared to PoW.
With this update, transactions on Ethereum will now take place with a more energy efficient mechanism, PoS.
The subject of our main article; What is the answer to the question of how Ethereum Merge will affect the tokens created on the Ethereum blockchain … ?
Ethereum Merge; They state that it will not affect tokens created on the Ethereum blockchain. Ethereum tokens in your crypto wallets will not be lost and can be used in the same way after Ethereum Merge takes place.
Ethereum blockchain; With Merge, it only changes the consensus mechanism. The consensus mechanism, on the other hand, determines how transactions will be verified. But the blockchain history does not change. In other words, all transactions and ETH tokens produced so far will continue to be stored on the blockchain in the same way.
My Last Words; Merge update of Ethereum, the second-ranked altcoin leader in terms of market value after Bitcoin, is eagerly awaited. With this update, tokens moved to other blockchains can return. We'll wait and see …
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