Crypto's Long-Awaited 'Merge' Reaches the Finish Line (nytimes.com) 67
The moment finally arrived, in the last minutes before midnight on the West Coast on Wednesday. After years of delays, discussions and frantic experimentation, the popular cryptocurrency platform Ethereum completed a long-awaited software upgrade known as the Merge, shifting to a more environmentally sustainable framework. From a report: Ethereum is arguably the most crucial platform in the crypto industry, a layer of software infrastructure that forms the basis of thousands of applications handling more than $50 billion in customer funds. The upgrade is expected to reduce Ethereum's energy consumption and set the stage for future improvements that will make the platform easier and cheaper to use.
Celebrations erupted on a YouTube livestream where engineers and researchers who worked on the Merge had gathered to mark the milestone. It was a rare moment of joy in a grim year for crypto that saw a devastating market crash drain nearly $1 trillion from the industry, forcing some prominent crypto companies into bankruptcy. [...] The technical details of the Merge are mind-bendingly complex. But, ultimately, the process boils down to a shift in how cryptocurrency transactions are verified.
In traditional finance, an exchange of funds involves an intermediary, like a bank, which verifies that one entity has enough money to make a payment to another. Crypto was designed to eliminate such financial gatekeepers. So, early crypto engineers had to devise an alternative system to ensure that users had the funds they claimed to have. Their solution was called "proof of work." Under that system, powerful computers run software that races to solve complex problems, verifying transactions in the process. The system is widely known as "mining" because the computers earn payments in cryptocurrency as rewards for the verification service.
Celebrations erupted on a YouTube livestream where engineers and researchers who worked on the Merge had gathered to mark the milestone. It was a rare moment of joy in a grim year for crypto that saw a devastating market crash drain nearly $1 trillion from the industry, forcing some prominent crypto companies into bankruptcy. [...] The technical details of the Merge are mind-bendingly complex. But, ultimately, the process boils down to a shift in how cryptocurrency transactions are verified.
In traditional finance, an exchange of funds involves an intermediary, like a bank, which verifies that one entity has enough money to make a payment to another. Crypto was designed to eliminate such financial gatekeepers. So, early crypto engineers had to devise an alternative system to ensure that users had the funds they claimed to have. Their solution was called "proof of work." Under that system, powerful computers run software that races to solve complex problems, verifying transactions in the process. The system is widely known as "mining" because the computers earn payments in cryptocurrency as rewards for the verification service.
Crypto's Merge? (Score:5, Interesting)
Is this Forbes?
Fun fact: $ETHW is going live within 24 hours with the old Ethereum chain data, so now there will be the old PoW Ethereum still running with miners and a new PoS Ethereum, increasing the total energy consumption from where they started.
Also notable: PoS $ETH already issued its first punishment (slashing) to a node, which was probably misbehaving due to a launch bug, confiscating its staked Ethereum tokens for some period of time.
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AFAICT $ETH will now be worthless for speculation and $ETHW will continue unabated.
I expect $ETH to crash and burn - nobody will be interested in a coin that can't be magicked out of thin air..
Re:Crypto's Merge? (Score:4, Insightful)
I expect $ETH to crash and burn - nobody will be interested in a coin that can't be magicked out of thin air..
That's a bizarre statement. Most people who use ETH were not miners. Mining hasn't been profitable - except on a grand scale - for a long time. AFAIK it's the smart contracts that make the most use of ETH, NEAR, and other cryptocurrencies that support them.
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I guess this is the main problem with PoW systems. If mining consumes so much power (and/or dedicated hardware) that very few "average Joes" want to get involved, then the whole point is somewhat defeated. The system is meant to be robust against small numbers of bad actors, but the total number of actors overall is kept small by the value prospect of mining. Thus the move to a proof-of-stake system? Does PoS make small-scale mining profitable enough? I'd expect a reward system to be something like ln(W) or
Re: Crypto's Merge? (Score:2)
Momentum igniters (mostly the exchanges trading against their customers), gamblers and greater fools move the price. Miners are irrelevant.
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The same comment was made in support of BitcoinGold, turns out that if a change is made and largely supported by the community then the "old fork" gets ignored and crashes. Miners don't pour a lot of energy into something worthless. It's not miners who determine how popular a coin's use is.
Re: Crypto's Merge (Score:1, Troll)
Ethereum already dropped 4% since midnight. This is going to be fun as billions of dollars are going to transfer out. PoS is basically classical banking, the exact opposite of what crypto was designed for.
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Ethereum already dropped 4% since midnight. This is going to be fun as billions of dollars are going to transfer out. PoS is basically classical banking, the exact opposite of what crypto was designed for.
5% swings in ETH are not unusual. Let me know when it's 15% or 20%.
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Now it's nearing 10%. There is a pretty steep cliff since the cutover.
I suppose it was inevitable (Score:3)
I suppose it was inevitable that some miners would object to the change. After all, they have invested in mining hardware that is now useless on ETH.
It's early days yet, but ETH is around $1600, which is a drop of only a few percentage points. Justified, given the inevitable risk of something going wrong. Meanwhile, ETHW started around $35, and is now trading lower. It doesn't look like people are taking it particularly seriously.
But it's early days - let's see where things are in a week...
Re: Crypto's Merge? (Score:2)
Anyone with ethereum should dump their accounts on the fork now, maybe the miners are stupid enough to try to protect the price.
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Basically the way it works the owners of ethereum can keep the market up or whichever fork they choose because they hold the majority of the currency that's backed by real dollars. If y
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Fun fact: $ETHW is going live within 24 hours with the old Ethereum chain data, so now there will be the old PoW Ethereum still running with miners and a new PoS Ethereum, increasing the total energy consumption from where they started.
Miners wishful thinking can't make a coin profitable. There needs to be demand for transactions for the coin. Most ETH users are not miners and I don't see them switching to ETHW.
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so now there will be the old PoW Ethereum still running with miners and a new PoS Ethereum, increasing the total energy consumption from where they started.
Not necessarily. $ETHW could very much become Bitcoin Gold, a fork that is largely ignored and not very heavily mined on account of that people didn't give a shit about forks and as such they become worthless.
The world will largely recognise one or the other. The one largely abandoned with crash in price and the miners (or those with proof of stake depending on what happens) will jump ship.
Huh? (Score:2)
I thought the whole cyptopocalypse thing was already going to make crypto eco-friendly.
So Bitcoin, etc still burning thru Elec. (Score:2)
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Good. Forks become worthless and miners bail out. Don't assume ETH POW will be popular just because it has the backing of miners. Miners don't determine if something has value or not.
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Its still out there burning electricity .. but there are fewer people doing the mining because the complexity has grown to where its unprofitable to mine unless you somehow get free electricity (or you are an organization where costs aren't the limiting factor e.g. governments.
WTF Ethereum held this? (Score:2, Insightful)
The Crypto market starts bankrupting so Ethereum pulls out a hole card it just happens to have ready today?
That’s another level of centralized
Re:WTF Ethereum held this? (Score:5, Informative)
This change did not come out of nowhere. Ethereum has been talking about proof-of-stake for years. The first official announcements of the switchover started coming out in Spring of [fortune.com] 2021 [slashdot.org]. The official switchover has been pushed back a number of times, but hasn't exactly been secret. It has also been covered in the tech press for several months.
/., I assume you do), and yet are surprised by this, then you haven't been paying attention.
In short: if you have even a casual interest in cryptocurrency (and since you're posting on this article on
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> In short: if you have even a casual interest in cryptocurrency (and since you're posting on this article on /., I assume you do), and yet are surprised by this, then you haven't been paying attention.
If you read comment section on cc/blockchain posts here on slashdot, you will notice the amount of stupid is astounding. People still struggling to explain basic concepts, such as what is PoW and PoS.
Most likely you're talking to a well off older crowd that don't really see a problem with the current banki
Summary misses the the main point (Score:2)
The summary says that "ultimately, the process boils down to a shift in how cryptocurrency transactions are verified". Then, after briefly recalling what the current mining model is all about, the summary completely omits the core of the article - how the model is going to change.
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In short, the model is going to change from proof of work to proof of stake.
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I am so not an expert, but I think:
- Proof-of-Work is spend enough money on hardware + electricty, and we'll pay you in Etherium coins to verify transactions.
- Proof-of-Stake is spend enough money on Etherium coins, and we'll pay you in more Etherium coins to verify transactions.
Re:Summary misses the the main point (Score:5, Informative)
Very short, and likely with technical inaccuracy, but indicatively;
Proof of Work: Look, I've guessed the right random number (the "work", involving millions+ of guesses), and therefore my (mining device) will get credit for this set of transactions! Thanks for some $crypto! FYI, I'm running (10s of thousands of) mining devices 24/7 to be lucky enough to get the right guess.
Proof of Stake: Look, I've put $crypto into an escrow (the "stake"), and my outputs (transaction validations) agree with the network! (the network will) randomly give me some $crypto! Take away my stake if I'm lying about the outputs. My (validation device) didn't have to work very hard to process the outputs.
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If so, then this statement from the article summarizing crypto's value seems quite ironic.
In traditional finance, an exchange of funds involves an intermediary, like a bank, which verifies that one entity has enough money to make a payment to another. Crypto was designed to eliminate such financial gatekeepers.
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In a sense, the "network" (miners or validators) have always been that "intermediary"; it's a distributed system, so most of (50%+1) of the validation nodes need to agree with the change. That doesn't change with proof of stake; but there's less incentive to run 1000s of validator nodes, as each node (or node group, I'm less sure here) needs its own, separate $crypto stake in order to be part of the pool. Which means that being a validator can tie up a great deal of your $crypto into that escrow account.
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So proof of work means each node is competing to solve the puzzle, and if a majority of other nodes agree then the winning node is awarded currency. The incentive was then to buy as many rigs as possible to mine the currency.
In proof of stake, those with at least 32 Ethereum get to act as a node and solve the puzzle. If the other nodes (those with a stake) validate the node's result, then the chosen validator earns an E
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Yes. And we're getting well past my knowledge here... but in theory, if you have 51% of the 'staked' currency, then you can control the network (though, if you lose said control, then you might also lose the stake, if the remainder of the network agrees that you've been bad). There are supposed to be ways to mitigate this risk -- including for instance that all staked currency is in effect frozen, so if you want to spend it you have to un-stake it. And staked funds are locked (on ETH, at least) for a ca
Is this the Finish Line? (Score:4, Informative)
If it is, it was only a qualifying sprint. Now they have to prove that their Proof of Stake chain can survive. Isn't that the real race?
I hope it can work out, because I'd like to see Proof of Work chains outlawed, at least if the work in question wasn't going to be done anyway. If someone can successfully merge Proof of Work with distributed computing in such a way that it's somehow based on actually useful work being done, that would conceivably be an acceptable way to do PoW (if the overhead were small enough, and/or the volume low enough.) I thought that was what Ethereum was supposed to do in the first place? But maybe I'm misremembering that, and it was another CC.
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If it is, it was only a qualifying sprint. Now they have to prove that their Proof of Stake chain can survive. Isn't that the real race?
Not exactly, miners are hard forking it to keep using proof of work [decrypt.co]
The markets will determine which will survive and continue to have liquidity (perhaps both will) but holders of token can win either way.
Purge? (Score:5, Insightful)
So, there's a flowchart showing that eventually, in order to improve performance, old transactions are going to be purged from the blockchain.
Doesn't that miss the whole point of a blockchain?
It seems like they're re-inventing a database that rotates its log files after they get too big.
Re:Purge? (Score:5, Interesting)
It does seem counter intuitive as a blockchain is used as the immutable record of transactions... but in the real world there is a limit to everything. You are only required to keep tax return records for seven years. Older ones I dump. My ten year old checkbooks have long been (or not been) reconciled. Being useless, they are thrown out. Here at work we only keep about 6 months of emails on the server - older ones are archived - so the server doesn't buckle under the weight of all that old email.
Very old blockchain records of transactions made eons (in crypto's view) are also useless, and can be safely lopped off. Shave a few gigabytes off the blockchain - it can only make it perform better. I'm sure someone will "archive" the part that gets purged out, if anyone really needs it - but think of that as an offline backup.
Re:Purge? (Score:5, Insightful)
So, if I'm reading you correctly, your assumption is that you can by policy (make sure X people preserve an archive), have the same effect that is currently forced by protocol (if you clone a git repo, you have cloned 100% of its history).
I guess the danger with that is that you're moving from a no-trust model (distributed block chain), to a high-trust model (I trust the people who will preserve the archive will not modify it).
It feels like people are starting to realize that decentralized blockchain as currency isn't realistic, and they're moving back to existing financial information systems (lightly distributed databases, ephemeral log files).
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It's still not centralized. Not in the way you're thinking anyway.
Whether you start the chain from block 0 or block 100000000, it doesn't matter. The genesis has to start somewhere and then it is distributed to all nodes. Then trust is established from node consensus from that start point. It doesn't matter what that point is as long as most nodes in the distributed system agree that's the valid starting point.
Think of it this way. You could make a new coin where you give yourself a billion coins right at g
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I was just talking about guys saving the archive of old purged records. Once it's no longer on the active blockchain, there's no incentive for consensus - I mean, maybe just *one* person decides to save the backup. Or maybe two people do, but one of them modifies the backup (I know, checksums and all that, but now you've got to make sure someone you trust saves the file size and checksum somewhere). And maybe they modify the backup in order to fake a paper trail they're using to sue someone for fraud, et
Checksum the archived copies (Score:2)
I guess the danger with that is that you're moving from a no-trust model (distributed block chain), to a high-trust model (I trust the people who will preserve the archive will not modify it).
Isn't this a problem that can easily be solved by old fashioned checksums? Okay, maybe not old-fashioned checksums, but one of those supposedly quantum-proof hash functions. The hashes of these archives could be publicly posted, maybe even physically encoded in a piece of sculpture or wall in a sort of crypto-museum which users can visit to verify.
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Sure, but that takes it from a no-trust model to "I trust my public mirrors" model. Not the end of the world, for sure, but it's no longer *algorithmically* no-trust.
I suppose there's also the technical question of purge rate - do you rotate ever X months? or all transactions older than Y age? Whatever that operation is, if it's algorithmically determined, there may be 2nd and 3rd order consequences for the no-trust consensus.
Now that I think about it, this whole 'merge' operation (and any other technica
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If you have them, you have to hand them over, but if you don't have them, 3 is all that's required.
Re: Purge? (Score:2)
and as we all know, there is only one jurisdiction on Earth, right?
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Tax returns are only required to be kept 3 years, not 7 https://www.irs.gov/businesses... [irs.gov]
If you have them, you have to hand them over, but if you don't have them, 3 is all that's required.
No it's 5 years. https://www.ato.gov.au/individ... [ato.gov.au] Like seriously what even is an IRS? It doesn't even have the word taxation in the title, so clearly the Australian Taxation Office is a more legitimate source of information.
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You are only required to keep tax return records for seven years.
That is for audit purposes only. We're not talking about audit, we're talking about proof of ownership. In the real world that only comes in the form of someone certifying your ownership (i.e. the bank agreeing that you do in fact own the money, or the government agreeing your cash is valid). That's why traditional banking only requires a short audit trail, implicit trust.
Now if you don't have a traditional bank then the audit trail is the only proof that you legitimately have some money.
Worth noting the ca
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So now you need money instead of CPU power? (Score:2)
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So now you simply deposit money and it becomes a token? Ok great. But what-a-bout all the speculators that could make money by just churning through CPU cycles - do they just migrate to other crypto now?
If they are ASIC miners, they may have to hope that the 'unofficial' fork holds its value. I imagine the economics of mining a well-known coin like Etherium with actual CPU are fairly bad.
Programming Like It's 1965 (Score:2)
The main reason is the language/environment is so simplistic/limited, essentially every program that's possible to create with it has been done. The only "work" left to be done is fiddle with register commands to reduce costs.
So they're moving to a banking system now? (Score:5, Insightful)
A party gathers a lot of etherium, aka money, and then they get to be a clearing house of transactions, also known as a bank?
Crypto bros are fucking cunts.
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But - cunts with foresight. Typed from my office within the mansion that crypto paid for whilst I take a break from running my SME that I founded using the profits of crypto.
Even true, it would be "The mansion that the people below me on the pyramid scheme paid for".
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Definitely true. Scammer cunts gonna scam.
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> A party gathers a lot of etherium, aka money, and then they get to be a clearing house of transactions, also known as a bank?
No, not a "party". Individuals. So if you have 32 ethereum, you can stake it and receive rewards for keeping it staked. And you can do it on a cheap atom laptop that you have doing nothing,compared to high end gpus people needed to mine blocks. The more stakers, the more secure and decentralized the network is. That is not what a bank is. None of the stakers have any rights. You
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Thanks. So now I have confirmation that the entire purpose of the system is to keep the system running and pull more people in to keep the system running. The entire purpose of crypto is to attract money to crypto. A pyramid scheme that fucks over the late and the stupid.
So I stand by what I said earlier: Crypto bros are fucking cunts.
Time to hit ebay (Score:3)
On another note (Score:2)
Apparently Queen Elisabeth, who never paid any taxes, will also take all her cryptocurrency with her to the crypt.
Disturbing lack of Bitcoin support here... (Score:2)
Crypto? All of it? (Score:2)