How to Buy Ethereum (ETH)

Over the past several years, the first generation blockchains like Bitcoin and Ethereum have come under severe criticism for using the energy-intensive proof of work consensus mechanism. Mining cryptocurrencies like BTC and ETH require considerable power and computing resources, making operating the blockchains expensive and harmful to the environment.

A move to a proof of stake consensus algorithm will make the Ethereum blockchain far more energy-efficient, bringing down its energy consumption by as much as 99.95%. This will not only make the popular decentralized platform for applications more responsible towards the environment but more affordable to access and use.

After the transition to PoS consensus, the next stage will see Ethereum developers solve another critical challenge that has plagued the blockchain in recent years. With work on sharding capabilities, Ethereum’s blockchain will enjoy higher throughput by processing transactions in parallel and helping reduce gas fees.

Although the Merge will make the Ethereum network significantly more efficient in terms of energy consumption, experts have cautioned that it will not impact gas fees immediately. The transition to PoS consensus will not directly affect Ethereum’s transaction fees.

However, this critical network upgrade will set the stage for making the Ethereum blockchain more efficient overall. After rolling out the PoS consensus, the Ethereum Foundation will shift its focus to tackling the network congestion issue by implementing sharding. As network congestion on the blockchain reduces eventually, the transaction fees will also come down.

After the Ethereum Merge, when the blockchain transitioned to PoS, it is no longer possible to mine Ether. The PoS Ethereum Mainnet, after the Merge, will not support ETH mining. You can, however, stake ETH to earn attractive rewards.

Staking is one of the most beneficial ways to earn passive income from your ETH holdings while helping improve the security of the Ethereum blockchain. You can become a full validator on the Ethereum network by staking 32 ETH. This will give you the power to store data, process transactions, and add new blocks to the network, earning block rewards in exchange for your work.

You can also stake less than 32 ETH in a staking pool to enter the world of Ethereum staking and earn rewards. There are several staking services you can register for to participate in staking pools.

Ethereum 2.0 went live on 15 September 2022, although the term itself is getting phased out by developers and being replaced with Ethereum Merge. ETH 2.0 refers to merging the Ethereum mainnet with the Beacon Chain, a side chain that enables staking on the network.

Upgrades to the blockchain are shared in the form of Ethereum improvement proposals (EIPs). ETH 2.0 is the term given to the upgrades of the Ethereum blockchain as it transitioned from proof of work (PoW) to proof of stake (PoS) consensus.

Ethereum 2.0 will make the blockchain more secure, scalable, and sustainable. After the successful rollout of the Merge, the next phase of Ethereum’s upgrade will involve sharding, making the network significantly more scalable and faster.

The Ethereum Shanghai Upgrade is a hard fork of the blockchain that will complete Ethereum’s process of transitioning from a Proof-of-Work (PoW) consensus to Proof-of-Stake (PoS). Also called ‘Shapella,’ the most critical aspect of this long-awaited upgrade is that it will allow users to withdraw their staked ETH tokens.

Ethereum officially migrated from PoW to PoS consensus in September 2022 with The Merge, while ETH staking has been supported on The Beacon Chain since December 2020. The Shanghai Upgrade is the next significant milestone in the Ethereum 2.0 journey, as the world’s leading ecosystem for dApps evolves into a more efficient and scalable network.

Following the Ethereum Shanghai hard fork, validators who staked their ETH tokens on Ethereum’s PoS network will be able to unstake their locked tokens and rewards. Ethereum developers expect ETH Shanghai Upgrade to occur on or around April 12, 2023.