The Merge is complete

Good morning! Welcome to The Daily Moon. The Merge is done and dusted. But that's not the end of Ethereum's facelift. Ethereum co-founder Vitalik Buterin says that there'll be four more upgrades. Surge, Verge, Purge, and Splurge. Too complex? We've got you covered.

The markets got no boost from the Merge. Bitcoin slipped to ~$20,000 while Ethereum was below $1,600. Nasdaq fell in early trade. Back home, Sensex and Nifty fell for the second day in a row.

It’s A Done Deal

The Merge is complete. At 12:12 PM yesterday, Ethereum officially switched to proof-of-stake. The token fell 0.4% to $1,632 immediately after the final trigger.

What happened?Ethereum used a proof-of-work consensus mechanism. That meant high-power computers validated transactions or the addition of new blocks. Ethereum has now moved to proof-of-stake where there won’t be miners anymore. Miners will be replaced by validators.

Wow, validators?Anyone can run for a validator position. All you have to do is deposit 32 ETH and enter the fray to be a validator. The higher the Ethereum you stake, the higher the chances of selection. Let’s break this down:

1. Say you stake 32 ETH to become a validator. These tokens cannot be spent.

2. Once the Ether is deposited, the user joins the validation queue. Validator slots are created every 12 seconds.

3. The blockchain selects 128 validators randomly. Of these 128, one validator proposes the addition of a new block, and the rest 127 vote on the proposal and approve it.

4. When the majority agrees, the block is added to the blockchain.

5. Dishonest validators who approve multiple blocks are penalised. This means they can lose anywhere between 1-100% of their staked Ether.

What does it mean for you?Depends on who you are. The blockchain becomes energy efficient because there won't be any mining.

Overall, the Merge will reduce worldwide electricity consumption by 0.2%. Think of it like Finland has shut off its power grids. There is now energy savings+environmental impact.

If you use decentralised applications or dApps, your transactions may get faster. Earlier, Ethereum could handle ~30 transactions per second. Its 2.0 version could handle up to 100,000 transactions per second after completing all the upgrades.

Let’s talk risksEthereum prices could be volatile in the short term because traders could buy to get some airdrops of the hard fork token.

ICYMI, a PoW hard fork by some Ethereum miners is scheduled for Friday. Let's see how that one goes.

A Risky Merge: Replay

Now that the Merge is done, expect to hear a lot more about what went right and what didn’t. The crypto community has been talking about possible risks for a while. One of these is called a replay attack. And it happens every time there’s a hard fork of a blockchain.

ETH and ETHWNobody likes to go out of business overnight. Like ETH miners. So they’ve decided to fork the Ethereum blockchain. The EthereumPoW was scheduled to go live 24 hours after the Merge. Here is what it does:

1. The blockchain will have two identical instances.

2. All ETH transactions and tokens exist as proof-of-work and proof-of-stake.

So what’s the catch?This allows the two forked cryptocurrency transactions to be valid across both chains. Cybercriminals often exploit this situation to steal your cryptocurrency. A few ways to keep yourself safe are to transfer your PoS assets to another wallet, transact with low gas, and mess up transaction nonces.

Craig Wright’s Secrets

Remember Craig Wright, the Australian who claims to be the OG Satoshi Nakamoto? Now he has told a Norwegian Court he stomped on the hard drive that contained cryptographic keys that could prove he is Nakamoto.

Wait, what?Yeah. It’s strange. But nothing about Wright is straightforward. Remember we told you Twitter crypto star Hodlonaut called Wright a fraud and now is facing up against the Australian in an Oslo court? Well, now Wright can’t back his claims and says “identity is not related to keys”.

Why does this matter?For the crypto world, the identity of the person or persons who invented Bitcoin is one of the “most stubborn mysteries of the 21st century”. There is also the question of the nearly 1.1 million Bitcoin Nakamoto is supposed to have mined in the early days. Which, if his drive has been stomped upon, are lost because the keys are gone.

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