Morgan Stanley says changing to Proof of Stake might not solve Ethereum's scaling problems. An equity strategist for Morgan Stanley claims Ethereum beacon-mainnet merge will cause demand for graphics processors to plummet in the coming months. The Ethereum platform has been undergoing a parade of testnets preparing for its merge with Beacon Chain. This merge is a move to facilitate the blockchain's transition from operating a Proof of Work model, to Proof of Stake. The PoW consensus model understandably…
The Sepolia testnet is live in readiness for a trial merge that will supply Ethereum developers with vital technical insights.
Sepolia’s upcoming integration with Ethereum’s Beacon chain will deploy Proof of Stake in achieving consensus instead of Proof of Work. The purpose of this testnet is to supply a picture of what could happen when Ethereum 2.0’s Merge finally goes live.
Why Ethereum is Moving from PoW to PoS
The energy-intensive Proof of Work (PoW) model Ethereum blockchain uses has been a huge source of concern. Digiconomist estimates that the network expends 110 terawatts of electricity a year.
To get a clearer picture of this, the figure is almost equal to the same amount of energy expended by the Netherlands annually. Which is also significantly greater than what Pakistan or the Philippines consumes. Reasonably, the electricity drainage and other environmental concerns motivated Ethereum’s intense research to effect a move to a Proof of Stake model. If successfully achieved, the new model would reduce Ethereum’s energy utilization by 99.9%.
Deployments and Possible Merge Delay
Regardless, Ethereum enthusiasts might not want to get too excited yet. If anything, Ethereum’s Merge has been postponed more times than anyone can count.
In 2020, the Beacon chain was launched as the mechanism on which the new Ethereum 2.0’s PoS model will be structured. Once the Beacon chain passes approval after integration with testnets, the Ethereum mainnet merge will finally take place.
Ethereum’s developers initially deployed Ropsten, the network’s oldest public testnet. Ropsten has been running for the longest period for any testnet. After going live in late 2016, it finally merged on June 8. The testnet’s blueprint imitates Ethereum’s mainnet operations without disrupting the online mainnet.
Sepolia which started in October 2021 was made for the same purpose. It will gradually phase out Ropsten per Tim Beiko, the main developer for the Ethereum network.
Beiko mentioned that the developers are also urging all projects currently on Ropsten to move onto the Sepolia testnet to circumvent complications. Nevertheless, at present, Sepolia’s merge date remains undecided.
Merge Date Could Change
Ethereum’s mainnet merge could finally happen in August 2022 after delays on numerous occasions. However, there are suggestions that Ethereum developers could postpone the date due to a lag in the deployment of the difficulty bomb. (The difficulty bomb is a technique for disincentivizing Ethereum mining. It makes mining with physical equipment extremely difficult, to discourage miners.)
In short, we agreed to the bomb delay. We were already over time, and want to be sure that we sanity check all the numbers before selecting an exact delay and deployment time, but we are aiming for a ~2 month delay, and for the upgrade to go live late June.
— Tim Beiko | timbeiko.eth 🐼 (@TimBeiko) June 10, 2022
Regardless, once the Merge eventually occurs, Ethereum will finally say goodbye to the PoW days. The network will then be able to move on to the less energy-intensive Proof of Stake model for achieving consensus.