The highly anticipated upgrade for Ethereum, popular as Shapella or the Shanghai upgrade, has finally been completed. The upgrade involved creating a new blockchain, which allows users who have betted their (ETH) Ether to validate and secure trades on the network to withdraw their funds. This marks a significant landmark for the Ethereum investors. It completes the transition to a complete proof-of-stake web, where users stake crypto as a guarantee to secure unused data blocks, media reports said.
Previously, Ethereum used the exact proof-of-work mechanism as Bitcoin, but now the network has moved to a proof-of-stake system. However, users could only draw their betted Ether or redeem accrued rewards now, an important feature of the latest paradigm. The hard fork was initiated at 22:27 UTC and processed about 285 withdrawals in epoch 194,408, totaling approximately $10 million. Despite market analysts speculating whether the hard fork would lead to a price rally or crash, the price of Ether remained mostly unchanged.
Validators play a crucial role in the Ethereum network, especially since the Merge changed Ethereum’s consensus system from proof-of-work to its proof-of-stake. The proof-of-stake consensus mechanism reduced 99% Ethereum’s energy consumption, and developers believe the network is now more secure and decentralized. However, the Ethereum blockchain plans to tackle scaling issues next, making transactions faster and cheaper.
According to Vitalik Buterin, co-founder of Ethereum, the network aims to enable a troop of tens or hundreds of isolated node operators, unlike a few large data centers. To become validators, users must stake at least 32 ETH, and the more ETH they stake, the more likely they are to propose a block of data transactions to be confirmed on the blockchain. In addition, validators receive extra rewards when other validators approve their block.
