The Ethereum network has successfully executed its most significant upgrade in years—marking a pivotal moment in blockchain history. Known as "The Merge," this transition officially shifts Ethereum from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) consensus mechanism, fundamentally altering how the network validates transactions and creates new blocks.
On September 15, 2022, at block height 15,537,393, the Ethereum mainnet activated the Merge. The very next block—15,537,394—was the first to be produced under the PoS system, as confirmed by OKLink data. This milestone not only represents a technical triumph but also signals Ethereum’s commitment to scalability, sustainability, and long-term viability.
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The End of Ethereum Mining: From PoW to PoS
Ethereum's original consensus model, PoW, mirrored Bitcoin’s approach—relying on computational power to solve complex cryptographic puzzles. Miners competed using high-powered hardware, primarily GPUs, to validate transactions and earn ETH rewards. Over time, this led to soaring demand for graphics cards and massive energy consumption.
However, PoW’s environmental impact and inefficiencies prompted Ethereum developers to pursue a greener alternative. Enter PoS—a system where validators are chosen based on the amount of cryptocurrency they stake as collateral. Instead of burning electricity, participants lock up ETH to help secure the network and earn rewards.
With The Merge complete, traditional mining on Ethereum has been permanently phased out. Validators now play the central role in maintaining network integrity. This shift drastically reduces Ethereum’s energy usage—by an estimated 99.95%—making it one of the most environmentally sustainable blockchains at scale.
Market Reaction: Short-Term Volatility, Long-Term Confidence?
Despite the historic nature of the upgrade, Ethereum’s price did not experience an immediate surge post-Merge. At the time of transition, ETH was trading around $1,630. However, broader macroeconomic pressures quickly took center stage.
U.S. inflation data came in hotter than expected, with annual growth reaching 8.3% and core inflation rising 0.6% month-over-month. Fears of another 75-basis-point rate hike by the Federal Reserve triggered a market-wide sell-off. Ethereum dropped over 6%, dipping below $1,600, while Bitcoin slid to around $21,000.
This highlights a key reality: even transformative upgrades like The Merge don’t insulate cryptocurrencies from macro trends. Yet many analysts view the transition as a foundational improvement that strengthens Ethereum’s fundamentals for future growth.
What Changes for Users and Developers?
For everyday users and dApp developers, The Merge brought minimal disruption. Transactions continue to function as before, gas fees remain variable (though not directly reduced by the Merge), and smart contract execution is unchanged.
However, behind the scenes, the economic model has evolved:
- Block rewards previously given to miners (~2.08 ETH every 13.3 seconds) have been eliminated.
- Staking rewards are now the sole source of new ETH issuance.
- Approximately 13 million ETH are staked across the Beacon Chain, generating roughly 584,000 ETH annually in rewards distributed to validators.
This shift empowers a more decentralized and accessible participation model—anyone with 32 ETH can become a validator, reducing reliance on specialized hardware and lowering entry barriers over time.
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Will PoW Disappear Forever?
While Ethereum has moved on from PoW, it won’t vanish from the blockchain landscape entirely. According to Pan ZhiXiong, founder of ChainFeeds, PoW still holds strong security advantages and remains integral to networks like Bitcoin.
Moreover, there's growing interest in repurposing PoW-based computational power for productive use beyond mining—such as 3D rendering, scientific simulations, or generating zero-knowledge proofs. GPU farms once used for ETH mining could find new life supporting decentralized compute markets.
Still, for new blockchain projects, PoS has become the preferred choice due to its efficiency and lower environmental cost. Ethereum’s successful transition sets a powerful precedent.
The Rise of ETHPoW: A Miner-Driven Fork
Not everyone welcomed The Merge. As mining incentives disappeared on Ethereum’s mainnet, miner communities pushed forward with ETHPoW, a hard fork preserving the PoW mechanism.
Backed by mining pools and GPU manufacturers, ETHPoW aims to maintain a version of Ethereum where mining remains viable. However, adoption has been limited. Most major exchanges, developers, and protocols have aligned with the PoS chain as the “true” Ethereum.
Without strong ecosystem support or clear utility advantages, ETHPoW struggles to gain traction. For now, it remains a niche alternative rather than a serious competitor.
Frequently Asked Questions (FAQ)
What is The Merge?
The Merge refers to Ethereum’s transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS). It combined the existing Ethereum mainnet with the Beacon Chain—launched in 2020—to create a more energy-efficient and scalable network.
Does The Merge reduce gas fees?
No. While The Merge improved backend efficiency and security, it did not directly address transaction costs. Gas fees are influenced by network congestion and will be targeted in future upgrades like rollups and sharding.
Can I still mine Ethereum?
No. After The Merge, traditional mining on Ethereum’s mainnet ceased entirely. Block validation is now handled exclusively by stakers who lock up ETH as collateral.
How does staking work after The Merge?
Validators must stake 32 ETH to run a node and propose or attest to blocks. Smaller holders can participate via staking pools or liquid staking derivatives like Lido or Rocket Pool.
Is Ethereum more secure now?
Yes. PoS introduces stronger economic penalties for malicious behavior—slashing conditions deter attacks by threatening large financial losses. Additionally, acquiring 51% of staked ETH is far more expensive than amassing equivalent hash power under PoW.
What comes next for Ethereum?
Post-Merge upgrades focus on scalability and usability:
- Surge: Full sharding implementation
- Verge: Verkle trees for stateless clients
- Purge: Reducing node storage requirements
- Splurge: Miscellaneous enhancements
These phases aim to make Ethereum capable of handling millions of transactions per second while remaining decentralized and secure.
The Merge wasn’t just an upgrade—it was a rebirth. By embracing PoS, Ethereum has positioned itself as a leader in sustainable blockchain innovation. While challenges remain, including scalability and regulatory scrutiny, the foundation is now stronger than ever.
As the ecosystem evolves, opportunities abound for developers, investors, and users alike to build on a greener, faster, and more resilient network.
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