Ethereum Merge: What’s Changing For Ethereum Holders
laCollection NFT Platform’s CTO and co-founder, Fabian Langlet, unspools how Ethereum’s technical evolutions impact NFT owners.
The technological and ecological blockchain revolution everyone has been talking about has finally happened!
It is the first time in history that a major blockchain has changed consensus mechanisms, which validate transactions added to the blockchain.
Let’s go self-Q-and-A style, ready?
What exactly is the Merge?
FL: On September 15th, 2022, Ethereum, the second most important “blockchain” in the world after Bitcoin, changed consensus mechanisms, which validate transactions added to the blockchain, moving from “proof-of-work” to “proof-of-stake”.
What is proof-of-work?
FL: As a reminder, a “blockchain” is a digital database comprised of a network of computers allowing for data to be entered chronologically but can never be edited.
Reputedly unfalsifiable, the blockchain keeps track of all the operations that have occurred since its launch, which are themselves classified into blocks. It is up to its network of users, scattered throughout the world, to validate these blocks themselves.
Since Ethereum’s launch, “miners” have taken over this task of validation. They solve a complex mathematical problem that requires significant computing power in order to validate a new block on the chain: this mechanism is called the proof-of-work. In return, miners get a commission in cryptocurrencies.
However, the process consumes a large amount of electricity, due to the many computers that are permanently connected to accomplish this mission.
What is proof-of-stake?
FL: Ethereum’s founder, Vitalik Buterin, is banking on a greener alternative: the proof-of-stake mechanism. Participation in the validation of the network is no longer linked to the use of high computing power but to the pledging of part of one’s capital in ETH, the cryptocurrency associated with Ethereum, as collateral.
The goal?
For each validator to prove their seriousness in the eyes of other participants.
With the update, it will now be necessary to place a total stake of 32 ETH, or about 50,000 Euros, to be able to validate a block on the blockchain.
Are the gas fees going to lower?
FL: For now, the fees to make a transaction on the Ethereum blockchain remain the same. This is expected to be reduced following the next stage of The Merge known as “The Surge”, which is estimated for 2023 or later.
What happens with my previous NFTs bought with ETH?
A hard fork may happen, meaning the blockchain may be separated into two distinct chains following a division between the developers or the community related to the protocol of this blockchain.
In fact, some players today do not want to transition to the proof-of-stake chain of Ethereum and wish to stay on the proof-of-work, putting forward the idea of alternative blockchains that will use the history of the old Ethereum blockchain.
If after the Merge there is a hard fork, the centralized platforms will be able to choose if they support either chain and offer forked tokens to their users.
Concretely, if a user owned ETH on a platform before the Merge, they will be able to receive an independent copy of the ETH, which act as a separate digital asset, because of the hard fork.
Are there risks of scams with the Merge?
FL: Users will have to be careful about scams related to the Merge:
- Fake extensions of some digital wallets that will allow access to a blockchain issued from a fork.
- Fake airdrops, which generally consists of a blockchain or cryptocurrency project giving away tokens to make itself known. Fake projects might offer to give users funds, but will actually be traps to steal cryptocurrencies.
laCollection.io and the Merge
What will laCollection now be using going forward, proof-of-stake or proof-of-work?
laCollection will only be using proof-of-stake after this adoption of the Beacon Chain. Using this mechanism reduces energy consumption by 99.9%, so it is much better for the environment and demonstrates much better scalability
Does the Merge have an impact on laCollection’s platform?
The Merge does not have a noticeable impact on how you use laCollection. However, it will significantly reduce our and our users’ carbon footprints.
Are laCollection’s NFTs safe with the Merge?
It is completely safe to keep your ETH, NFTs and ERC20 tokens before, during and after the Merge. There is no need to do anything going forward, since all updates will be automatic.
Will you continue supporting the legacy Ethereum POW network?
No. The energy consumption does not align with laCollection’s sustainability goals and vision.
