Before its launch in 2015, Ethereum developers already had a stated ambition to replace its Proof-of-Work (PoW) consensus mechanism with an alternative one: Proof-of-Stake (PoS). While it was deemed too technically risky to start the network with anything other than PoW, the eventual migration to PoS has been a major goal of Ethereum developers and a highly anticipated milestone on their roadmap.
Key takeaways:
- The transition of Ethereum from PoW to PoS is seen as a watershed moment because it will lower energy consumption by 99.5%.
- Although many prototypes have been proposed, the migration to PoS has yet to be completed because problems have kept emerging.
- By implementing PoS, Ethereum trades off decentralisation and trust minimisation, thus resulting in a bigger attack surface.
Before its launch in 2015, Ethereum developers already stated their ambition to replace its Proof-of-Work (PoW) consensus mechanism with an alternative one: Proof-of-Stake (PoS). But it was deemed too risky to start the network with anything other than PoW. The migration to PoS is now considered to be an extremely important milestone. Developers regard it as a key prerequisite for several subsequent development goals, and the Ethereum community believes the reduction in energy usage (by over 99.5%) is worth the trade-offs in protocol attributes.
The reasons for the delays are numerous and complex, but they all boil down to PoS proving to be far more technically difficult to reliably execute than engineers had anticipated. Many prototypes have been proposed and evaluated, but problems have kept emerging, necessitating ongoing multi-year bouts of bug-fixes and redesigns. We can even observe the serial delays of the migration, often referred to as the Merge, from blockchain data.
There have been tests and practice merges, most recently on April 23 2022, conducted to ensure the mainnet transition proceeds safely. The Kiln testnet merged on March 15 2022 and incorporated the last major specification changes. Although many of these tests have been successful, others have raised concerns and probably contributed to the latest delay of the Merge from H1 2022 to H2 2022.
By implementing PoS, Ethereum trades off decentralisation, trust minimisation and censorship resistance. As a result, it will suffer from a much larger attack surface. In return, it gets vastly increased on-chain data throughput (scalability), and drastically reduced energy consumption. Whenever it happens (probably this year), the Merge will represent a major shift in Ethereum design, capabilities, and attributes. Merging Ethereum will be a completely different system. We look forward to this next phase of the Ethereum project and will keep our investors informed as the work progresses.