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99.98% Less Power: The First ETH1 and ETH2 Merge Transaction

Blockchain security provider Sigma Prime has confirmed its first merge transaction between ETH1 and ETH2 networks.

The transaction was realized by one of its clients, Lighthouse, using just Proof of Stake validators, as it was revealed in a tweet from March 25th. It also mentioned that it represented an important step toward a 99.98% drop in Ethereum energy consumption. The number was achieved by comparing the current Proof of Work ETH1 with the highly efficient and improved Proof of Stake ETH2.

Sigma Prime has mentioned that while this is a thrilling achievement, it is still far from production, as a result of the fact that it is a prototype that still requires a lot of work:

“Primarily, you should take this is a signal that ETH1 and ETH2 developers are actively working together on the merge.”

Trailblazing

But this isn’t really the first time that this feat was accomplished, as Sigma Prime pointed out itself – in August 2020, the Teku Ethereum client had also managed to demo a prototype that was able to perform any ETH1 transaction in an ETH2 environment.

This transaction represents just a segment from the first steps that are taken toward Phase 1.5 in the Ethereum 2.0 upgrade roadmap, which, via a “docking” process, will merge the ETH1 mainnet with the ETH2 Beacon Chain and sharding system.

The transition to Proof of Stake will remove the high levels of energy consumed by the current mining operations of ETH1. The blockchain will continue to run as a shard of ETH2 following the completion of Phase 1.5.

A debate regarding mining and its consumption of power was started on Reddit following the new developments by Lighthouse.

Pointing out to the increased cost of electricity and graphics processors needed, in a period of global chip shortage, Redditor HighlightAccording98 commented it might actually be simpler to profit from staking than from mining.

“If I were a miner I would be sitting on a pile of staked ETH from selling my equipment collecting APY and waiting for the merge.”

At the moment, staking on Beacon Chain has an APY of 8.2% with 3.6 million ETH having been already deposited.

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