A quicker, more affordable network is what everyone wants, but it may not be in the cards just yet. What then do we anticipate this merger will bring to the table?
The long-awaited Ethereum Merge, which replaced the energy-intensive proof of work (PoW) consensus mechanism with the more environmentally friendly proof of stake algorithm (PoS), was completed early on September 15, 2022. It’s a significant event. Never before has a blockchain switched from PoW to PoS, and the change will have long-lasting effects on society as a whole, not just the cryptocurrency industry.
What did it not do? reduced gas prices Certainly, not directly. But it did pave the way for something more significant. It did, however, create the foundation for future gas fee optimizations, which is good news. This article will discuss Ethereum gas, what The Merge accomplished, why it didn’t reduce gas prices, and the enhancements it made to future scalability.
Why Ethereum Gas Fees is so high?
On the Ethereum network, the user must pay a set amount of gas for each transaction. In essence, “Gas” serves as a unit of measurement for determining the costs associated with putting a transaction in the “blocks” that make up the ETH blockchain.
even if gas prices are currently relatively low, they have historically been constantly high. Gas prices were nearly 10 times the average price today throughout the majority of January 2022, averaging around 150 gwei per block.
ETH Gas Fees After The Merge
The Merge didn’t directly reduce gas prices. Nothing expressly intended to reduce fees was included in The Merge’s technical advancements. It did, however, succeed in establishing the technical framework required for upcoming gas improvements
Activating PoS was the first step toward enabling sharding. That is the subject of the next section of our article. Sharding: What is it? How would sharding lower gas prices?
Ethereum and Sharding
Sharding could be the solution to the persistent scalability problem in the cryptosphere.
Many of us see a blockchain as a lengthy line or chain of information when we conceive about it. Let’s use this concept to better understand sharding, then. A typical blockchain is made up of a single chain of blocks and works as a standalone network for decentralised data storage. While this is by no means a seriously defective system, scalability issues are a major concern for autonomous organisations due to the rising popularity of cryptocurrencies and blockchains.
Additionally, sharding may unquestionably help with scalability.
Sharding is the process of dividing a blockchain into many “shards.” There are several parts to the process itself, including the horizontal segmentation of databases, which assigns each blockchain its own function or goal. One blockchain may be used to hold information on a specific coin, while another might be used for network administration.
It’s crucial to understand that sharding differs from hard or soft forks because when the blockchain is divided, the protocol is left unchanged. The difference is that each blockchain shard still adheres to the same protocol while processing and storing its own distinct data that may still be shared with other nodes. This method of distributing data storage among blockchains can greatly increase efficiency.
With this improvement, the network may be divided into “shard chains” that distribute Ethereum’s burden, ostensibly relieving congestion and boosting transaction throughput. Sharding, which is expected to start in 2023, will allow the network to scale dramatically.
Sharding may hypothetically boost Ethereum’s transaction throughput to 100,000 transactions per second if it is put into use, outpacing all major credit card providers in terms of speed.
The “rollup centric” vision for Ethereum will function with sharding. According to the Ethereum Foundation, “sharding plans have shifted to finding the most optimal way to distribute the burden of storing compressed calldata from rollup contracts, allowing for exponential growth in network capacity,” given the development and success of layer 2 technologies to scale transaction execution.
Future Of ETH Gas
On July 21, Ethereum co-founder Vitalik Buterin announced at the Ethereum Community Conference (EthCC) that there would be a few more stages in Ethereum’s development roadmap after The Merge:
The Surge: which is slated to launch in 2023 and will bring side-chains and sharding to Ethereum, will also speed up and lower the cost of transactions.The Verge: Improvements to the current Merkle proofs and the introduction of Verkle Trees. Verkle Trees will reduce the size of current nodes and optimize network storage.The Purge: During this phase, simplifying network storage by removing unused archival data will take precedence over lowering network congestion.The Splurge: A series of minor updates to optimise network performance and fix any problems that surfaced during earlier development phases.
This should be encouraging news for people who are concerned about gas fees. The Merge demonstrated the Ethereum development community’s capacity to handle significant technical accomplishments. Clearly on their radar, and with the switch to PoS, it will get greater attention, is lowering gas fees.
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The Ethereum Merge is Complete, but Will Less Money Be Paid in Gas Fees? was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.