Ethereum’s record stretches from the 2015 Frontier release through the September 2022 consensus layer replacement. Each protocol revision left observable traces – the 2016 hard fork that reversed the DAO exploit, the 2017 Byzantium gas cost rebalance, the 2019 Istanbul precompile additions, the 2021 London base fee introduction. The Merge continued the sequence – substituting proof-of-stake for proof-of-work at block 15,537,393. Observers label the resulting network âEthereumâ; the Ethereum Foundation labels the consensus layer âETH 2â and the execution layer âETH 1â.
The Beacon Chain launched on 1 December 2020 at slot 0. It operated in parallel with the proof-of-work chain for twenty one months – processing attestations and slashings without executing user transactions. Validators deposited thirty two ether per set to join the active set. Rewards arrived as base and priority fees denominated in ether.
Fast Fact
Before the Merge, the proof-of-work chain limited throughput to roughly fourteen transfers per second. Congestion raised gas prices above two hundred gwei during peak NFT mints. State growth exceeded one hundred megabytes per day – forcing archival nodes to store more than nine terabytes.
Smart-contract applications – decentralized exchanges, collateralized lending pools, algorithmic stablecoins, on chain insurance, parametric freight tracking, DAO treasuries – competed for the same block space. Each category required predictable settlement finality and low transaction cost.
Post-Merge, the network retained the same execution throughput. Proto-danksharding along with full danksharding will expand data availability. Proto-danksharding introduces one megabyte blobs that expire after roughly eighteen days. Validators attest to blob availability without storing the data permanently. Rollups post compressed transaction batches to blobs – reducing calldata cost by an estimated ninety percent.
Important
Proof-of-stake eliminates hash based mining. The protocol pseudo randomly selects a validator as block proposer for each twelve second slot. Attestations from at least two thirds of the validator set finalize the epoch. Energy use dropped from roughly five gigawatts to twenty five megawatts, a ninety nine point nine five percent reduction.
Fast Fact
Target throughput after full danksharding exceeds one hundred thousand transfers per second. Each blob carries roughly one hundred twenty eight kilobytes of rollup data. Sixty-four blobs per block yield eight megabytes of data every twelve seconds.
Rollups settle proofs back to layer one. Optimistic rollups submit fraud proofs within the seven day challenge window. ZK rollups submit validity proofs with each batch. Blobs remove the need to store rollup transaction details indefinitely – preventing state bloat.
Node operators retain only recent history. Expired blobs prune automatically. Disk use growth drops to roughly fifty megabytes per day for a full node.
Will ETH 2.0 Make ETH Worthless?
The Merge altered consensus rules, not monetary policy. Ether issuance dropped from roughly thirteen thousand per day under proof-of-work to roughly one thousand six hundred per day under proof-of-stake. Market price on 15 September 2022 opened at one thousand six hundred thirty dollars, closed at one thousand four hundred seventy dollars, within the prevailing downtrend.
How Much Energy Will Ethereum 2.0 Save?
Annualized consumption fell from forty six terawatt-hours to two point six gigawatt hours, equivalent to a small town. Staking yields four to five percent per annum in ether terms, paid from consensus layer issuance and transaction tips.
Will Ethereum 2.0 Overtake Bitcoin?
Bitcoin operates as a settlement network for the bitcoin asset. Ethereum operates as a programmable settlement layer for ether and arbitrary tokens. Market capitalization fluctuates daily. Developer count, transaction count in addition to fee revenue favor Ethereum. Hash rate, energy commitment next to monetary hardness favor Bitcoin. No protocol upgrade alters the fundamental design goals of either network.
The Merge completed the largest consensus upgrade in Ethereum’s history – it did not introduce a new investment thesis – it replaced miners with validators.
The Ethereum Foundation summarized the event: âThe Beacon Chain served as a parallel consensus layer for twenty one months. On 15 September 2022 the execution layer adopted its output – finalizing the transition. Future upgrades – Verkle trees, stateless clients, single slot finality – continue in public repositories.â
The commentary above serves as descriptive summary, not investment advice.