One of the most significant events in the blockchain space, the much-awaited Ethereum Merge of the Beacon chain or the Proof-of-Stake (PoS) consensus chain has finally been completed successfully. The Merge was supposed to take place when the Terminal Total Difficulty (TTD) of 58,750,000,000,000,000,000,000 happened on September 15th, 06:45 AM GMT. The first block generated by the new PoS consensus model post the merge was finalized on-chain 12 seconds after.

Post the Merge, the initial market reaction to Ethereum's price was fairly neutral with no sudden rapid upside or otherwise.

One of the immediate impacts of the Merge is the reduction in energy consumption by a whopping 99.5%. This would make the ecosystem more agreeable to a vast section of investment funds, users, analysts as well as developers who focus on ESG principles.

The importance of the Merge may be understood by the fact that the primary consensus mechanism which is pretty much the heartbeat of a blockchain network be replaced without skipping a beat. Add to it the fact that billions of dollars are being managed by the network and its ecosystem of smart contracts.

Also, Google chose to create a customized count-down time for the Merge event. Here is a glimpse of the same

What is this new token called $ETHPoW?

$ETHPoW is the direct result of the democratic philosophy of decentralized networks. Although most of the world has accepted and lauded Ethereum's switch to a PoS model, there are certain groups who think otherwise and would like to continue with the Proof-of-work model.

Without debating the good or bad aspects of such a move, the fact is that Ethereum in its PoW form will continue to live on as a separate network, a hard-fork as is called in blockchain parlance.

What that also means is that Ethereum holders would have an equivalent number of $ETHPoW tokens if they had held non-zero Ether in their wallet. The new chain would operate using a different chain identifier which is used to tell wallet clients which network to connect to.

Before you get excited about creating value out of thin air, it still remains to be seen how much value these new tokens would command. The more likely scenario is that it would be negligible compared to the primary Eth token on the PoS mainnet. However, if the value is significant, then it would also mean that the primary tokens would now demand a lesser value so there will be a balance and an equilibrium that would be arrived at.

Whether $ETHPoW rides into oblivion soon or becomes an underdog and an unexpected challenger in the game of dominance in the Ethereum world is a matter of speculation. As of today just after the merge, the $ETHPoW token is trading at 40 USD with a sudden spike to 60 USD.

A brief overview of how Proof-of-Stake works in the Beacon consensus chain

Now that all the focus is on Merge, it would be the right opportunity to understand more about this new consensus layer. The primary thing that is going to happen as part of the Merge is the switch from Proof-of-Work consensus model to the Proof-of-Stake consensus model facilitated by the Beacon chain consensus layer. For a primer on Blockchain Consensus mechanisms, you can refer to - https://mirror.xyz/durneja.eth/gKt8c26kbFUHyn8ITRaZD8aYXlPw9Ir5ObWPi7g91Cc

As the switch to PoS happens, mining as a concept will cease to exist for introducing new blocks in the Ethereum Mainnet. This is going to be replaced by a pseudo-random selection of nodes that would propose the next block. The proposed block would be validated by a “committee” of other nodes or “validators”. The block “proposer” is also a validator node that has been given the task of proposing a new block.

Earlier, a new block was introduced at roughly 13.2 seconds plus or minus depending on the hashing complexity/computing power. Now, epochs would become the primary time unit in the network and each epoch is going to be further subdivided into slots. Each slot would be exactly equal to 12 seconds, which would make the duration of the epoch to be around 6.4 minutes or 6 minutes 24 seconds. It may also happen that some of these proposers may fail to propose a block within the stipulated time period of 12 seconds. In that case, the particular slot would be empty and there are penalties involved in such scenarios for the particular validator/proposer.

Before an epoch begins, the proposers would be chosen from the set of validators for each slot. Also, the committee of validators is also going to be finalized.

An important thing to note here is that the probability of a particular validator being selected for proposing a block is directly proportional to the amount of Ether they have staked into the system. This is the primary proof of stake aspect where the more amount you stake to secure the network the higher the likelihood of your validator getting a chance to propose new blocks and thus get a portion of the additional transaction rewards. To reduce the motivation for validators to disrupt the system there is a minimum staking requirement of 32 ETH that is kept by the network. This is a primary requirement for a node to be considered as a proposer although there is no minimum requirement to run a node and secure the network by validating transactions and blocks.

This particular model makes the network highly secure as in order to put into effect an attack on the system, a validator must have staked a significant amount of tokens in the system and if fraudulent activity is detected by the other validators in the system, there is a very high risk of that validator losing out on all their staked tokens. Thus, the penalties for such action significantly outweigh any potential chances of taking control over the network, if at all there is a chance for the same.

If you want to explore block generation, epochs, and slots on a real-time basis, you can take a look at this explorer website - https://beaconcha.in/

The Merge event also lays the foundation for future Ethereum network upgrades that are focused on scaling, primarily the Sharding of the Ethereum chain is what is to come next as an upgrade.

We also covered some additional details about the Ethereum Merge in an earlier article that includes other references as well. Feel free to give it a read at - https://mirror.xyz/durneja.eth/6jr1A9QTho-B5Tv5VoXOzhKw4sZ9WgwD_WBzSYq65Ko