Co-founder and developer of the Ethereum Blockchain, Vitalik Buterin, announced that after “The Merge” slated for 19th September 2022, the Ethereum Blockchain will be able to process 100,000 transactions per second. He made this announcement at the Annual Ethereum Community Conference (EthCC) held in Paris.
At Ethereum’s current capacity, the Blockchain can only process 13 transactions per second (tps). If the 100,000 tps is realized, it will be a 769,000% growth in the network’s transaction speed. This will make Ethereum the fastest Blockchain in the cryptocurrency ecosystem toppling the likes of Binance Chain, Solana, Ripple and Algorand.
You might be wondering what “The Merge” is all about. Here is all you need to know about it;
* Ethereum is a Layer 1 decentralized blockchain that functions on a PoW mechanism in which miners must validate their transactions. Because of its highly decentralized level, the blockchain can only process transactions at 13 tps which is slow.
* Because of the Ethereum blockchain’s popularity, high usage and demand, transactions on the blockchain have exceeded one million per day according to Etherscan.
* This increase in transactions per day on just 13 tps results in high gas fees and extremely slow transaction speeds. The current PoW consensus cannot handle the current Ethereum transaction volume demand.
* Other blockchains now capitalized on this shortcoming and created their own blockchain known commonly as “L1s” or “ETH killers” which can process transactions much faster than the Ethereum Blockchain.
* These “ETH killers” have risen rapidly as more users have flocked to them because of their cheap transaction fees and speed. This has reduced the demand for the Ethereum blockchain and caused Ethereum’s market value share to decline from 100% to 55% in just two years.
* To solve this issue, the Ethereum developers, led by co-founder Vitalik Buterin, have decided to transition the Ethereum blockchain from the Proof-of-Work (PoW) mechanism to the Proof-of-Stake (PoS) mechanism in order to reduce transaction costs and increase speed and scalability.
* The transition process can be broken into three major categories; the beacon chain (already completed), the merge which can be defined as Ethereum’s official transition from PoW to PoS (slated for September 2022) and the sharding ( slated for 2023+). The merge which is slated for September 2022 can be broken into two categories; Deflation and rewards.
* The major benefit of the upgrade is that Ethereum blockchain’s native token, Ether, will see a an issuance decline from 15k per day to 1.5k per day which represents a 90% reduction in emissions. This emission decline is important as the current Ether issuance rate is causing a 3.2% yearly inflation which reduces the token’s value.
Vitalik affirmed that at the end of the Ethereum transition roadmap, Ethereum blockchain will have much more scalability. He also said that after the merge, it will be like Ethereum’s PoW phase never happened. He added that Ethereum’s overall network development will be 55% done when “The Merge” is completed. This means that there is still some work for developers ahead.
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