Ethereum’s impending Merge – the long-discussed update of the blockchain's software from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism – could prompt a global wave of people using the blockchain, including for global payments, according to one of the Merge’s leading developers.
Ethereum is aiming to be “a global settlement layer,” Preston Van Loon, an Ethereum protocol developer at software development company Prysmatic Labs, told CoinDesk TV on Tuesday.
“That means that everything can settle on Ethereum, even bitcoin [BTC], in the far future,” Van Loon said on CoinDesk TV’s “First Mover.”
“What it means is the proof-of-work side of Ethereum is now ready to merge with the proof-of-stake side,” Van Loon said.
One of the biggest obstacles to Ethereum's expansion has been the environmental impact of the proof-of-work mechanism, according to VanLoon. “We see this as a barrier for global adoption,” he said.
With the switch to proof-of-stake, Ethereum’s energy consumption should be cut by 99.95%. That could increase the appeal of Ethereum to institutions that have concerns with the blockchain’s environmental impact. Smaller computers requiring less power would be able to use the Ethereum network.
“With proof-of-stake, you can be a block producer and a participant in the consensus of Ethereum with something as small as a laptop, or a Raspberry Pi, in some instances,” Van Loon said. Raspberry Pis are small single-board computers that can be used to run a local Ethereum node.
Van Loon added that the beauty of proof-of-stake means "you simply have something at stake, saying I'm behaving in an honest way, rather than relying on this work mechanism" – referring to miners and their energy-hogging computers.
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Ethereum's security will also improve, he added. When the switch is made, he said, it could cost more than $11 billion at today’s prices to attack the blockchain, much more expensive than an attack through the proof-of-work mechanism.
Decentralization would be another benefit, said Van Loon. Participants can join and produce blocks on the network “with a minimal barrier to entry.”
Van Loon said users will not need to do anything ahead of the Merge, such as removing their ether (ETH) off-chain or placing it in cold wallets or on an exchange. “It's not necessary. You really just have to wait for the Merge,” he said.
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