What is the Ethereum Merge with Matt Cutler
The Bad Crypto Podcast
Proof of Stake
Etherium is set to merge its consensus layer with proof of stake. The move will reduce the network's energy footprint by 99 point nine five per cent, says Vitalik Buterin. There are a number of other uprates taking place as well that users won't notice at first. "It's an exciting time here in etherium land," he adds.
Ethereum is the second biggest thing in crypto, and it may one day flip Bitcoin in market cap. But the big news around Vitalik’s creation is the upcoming switch from proof-of-work to proof-of-stake. We have questions and concerns about this major change in how the Ethereum chain will operate.
So today we welcome Matt Cutler of Blocknative to the show to answer all our questions about the Ethereum merge. Someone call 911 because it’s an Ethmergency on episode #630 of The Bad Crypto Podcast.
Full Show Notes at:
00:00 - Intro - Twitter and jokes; don’t miss
08:02 - Matt Cutler, CEO of Blocknative
08:43 - A pre-chan internet? Is that possible? Matt gives his history in the technology space
09:40 - What is Blocknative?
11:03 - When did you get on board with blockchain and crypto?
12:25 - Early introduction to the Internet, and a comparison to the current early cryptocurrency market and adoption.
14:18 - What’s broken with Ethereum that we even need to move from POW to POS?
15:12 - We need more scalability for transactions beyond the current 13-14 transactions per second. Matt explains.
16:50 - In order to get to a future state without sacrificing decentralization, Ethereum determined it would be best to move from POW to POS.
17:25 - In a POW system, you need to operate computers to solve problems on the network, which also require large amounts of energy to operate. Externalities include the conversion of cryptocurrency to fiat to afford operating the system. These are problems proof-of-stake can solve.
18:45 - Reduced energy impact of operating the network is a benefit.
19:45 - What is the easiest, dumbed down way to explain the Ethereum Merge?
22:28 - What are we going to see? Are we going to see lower gas fees?
24:48 - Is there going to be a time where the Ethereum miners are going to be upset and earning less money? Will that cause people to flock to Ethereum Classic?
28:51 - Miles Sudor makes the case this merge is extremely dangerous for some of the reasons you mentioned, including UDC basically decides which chain wins and which chain loses. All of this introduces due to the OFAC regulation that base layer protocol censorship would be introduced on Ethereum, meaning very centralized crypto, which is not what Ethereum was intended to be. What are your thoughts on that?
36:41 - According to my research, there are over 4,000 ERC-20 tokens. What about those tokens? Will the Merge be noticeable to them? Will they have to upgrade their tokens?
42:32 - Let’s play a game here, and I want you to think about a nightmare scenario. What is the worst thing that could happen if everything goes belly-up here?
43:30 - The nightmare scenario for any chain - Bitcoin, Ethereum - is that the network stops producing blocks.
45:18 - This is a big event in technology.
45:55 - What’s the best case scenario? People are saying this is like a triple-halvening.
49:25 - What is Vitalik saying about the Merge?
49:50 - What should people be thinking about doing now, because if it is proof of stake, where and how should we be staking our Ethereum to earn other Ethereum? What are the parameters around that and how does that work?
51:00 - How do people stake?
01:00:00 - Outro with Joel’s golf story
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