The Ethereum Merge—the most closely-watched event in the crypto calendar this year—went smoothly. What’s next? A lot, it seems. To be sure, the monumental switch paves the way for Ethereum’s mass adoption as a chain. Yet, it turns out that this is a small step that achieved only 55% of the targeted result, leaving investors gasping about the goals left unaccomplished.
Thankfully, Vitalik Buterin’s speech at the annual Ethereum Community Conference (EthCC) in Paris on 20 July dropped some hints about what to expect going forward. Ethereum’s creator claimed that “after the Merge, we will be able to build an Ethereum client that doesn’t even know the proof of work phase happened.” In a jocular manner, Buterin also threw some light on post-Merge goals that Ethereum aims to accomplish, also naming them in chronological order: The Surge, The Verge, The Purge, and The Splurge.
The Merge: Consensus layer
Much has been written about the Merge, but a quick refresher may be in order. The Ethereum blockchain transitioned from proof of work to proof of stake consensus mechanism by “merging” Ethereum’s execution layer with the consensus layer, aka the Beacon chain (Ethereum staking sidechain).
First and foremost, the monumental shift would make the network super energy efficient. It is estimated that the switch would cut Ethereum’s power usage by 99% while also reducing the asset’s net issuance.
The Surge: Increasing scalability
This is the stage where Ethereum will begin making its network more scalable and easier for users to operate on by enabling sharding. But first things first, what is sharding?
Sharding is a scaling solution that divides the network’s load by breaking it into parts or “shards.” This would, in turn, disperse the network’s computational and data load without compromising decentralization. In Vitalik’s words, sharding “decouples the data contained on a blockchain from the data that a single node needs to process and store.”
Data dispersal on the Ethereum network is best understood if we know where data is stored on the blockchain. Ethereum’s PoW chain had a global network of nodes, each one required to store Ethereum’s entire transaction history along with smart contracts, codes written to administer funds, etc. Well, that’s a lot of data. But with the transition to PoS, this step was eliminated by replacing it with staking —or as our desi sharks would put it, the validators now have “skin in the game.”
In short, Ethereum wants to create decentralized alternatives to web2 apps. They aim to function as a “world computer,” which has no centralized authority and cannot be shut down at the will of eminent players. For perspective, these centralized giants use cloud-based services such as Amazon Web Services (AWS) to store petabytes of data from thousands of applications. Interestingly, sharding would enable Ethereum to attain the same capability on a decentralized level by allowing massive amounts of data to be stored without operational interruptions to the chain.
The Verge: Verkle trees
Complicated as it may sound, the Verge, aka transition to verkle trees from merkle trees is not that difficult to understand. Let’s break it down.
Like Surge, the Verge also seeks to promote scalability by improving data storage. Here’s how. A merkle tree is a data structure that serves to encode blockchain data more efficiently and securely. Put simply, it’s a data security system that creates reliable encryption by converting blocks of information to long strands of code.
Now, Verkle trees will just be an upgraded data security system that will allow for much smaller proof sizes by enabling Ethereum nodes to store large amounts of data by showing a short proof of any piece of that data. In other words, it is much like random checking, where any part of the data can be used to verify the whole block.
The Purge & the Splurge: Elimination and elevation
The Purge marks the second last stage for Ethereum ecosystem’s scalability solutions. True to its name, this phase aims to purge out or delete old irrelevant histories. By deleting excess historical data, Ethereum’s PoS system of validating the blocks will become even more efficient and faster. By the end of this phase, the network will be capable of processing 100,000 transactions per second, according to Buterin.
The Splurge—the final stage—has often been described as an afterparty, where “the fun stuff” will happen, but we don’t know exactly what it entails. However, it will certainly play a big role in running the upgrades smoothly, which would make Ethereum the superior network across industries.
Way to go, Ethereum
Energy efficiency, increased security, and improved capabilities are some of the touted benefits of the Merge. Further improving scale and efficiency are the declared aims of those fun-sounding post-Merge upgrades. If all goes to plan, the Ethereum Merge and its subsequent versions should usher in a rebirth of sorts for the crypto world, which has much at stake.