Ethereum's Energy-Saving Merge Upgrade

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The "Merge" is a change to the way Ethereum processes transactions and how new ether tokens are created.

Ethereum, the blockchain that underpins the world's second-largest crypto token ether, on Thursday underwent a major software upgrade that slashes the amount of energy needed to create new coins and carry out transactions.

Here's what you need to know about the "Merge" as the shift is known.

WHAT IS ETHEREUM?

Like other blockchains, Ethereum is essentially a digital database shared across a network of computers. It records ownership of the cryptocurrency ether, and other Ethereum-based digital assets such as non-fungible tokens.

Proponents say Ethereum will form the backbone of much of the widely hyped but still unrealised "Web3" vision of an internet where crypto takes centre stage in applications and commerce.

SO WHAT IS THE MERGE?

The "Merge" is a change to the way Ethereum processes transactions and how new ether tokens are created.

It involved the Ethereum blockchain combining with a new separate blockchain. The new system, known as "proof-of-stake", slashes the Ethereum blockchain's energy consumption by 99.9%, developers say.

Most blockchains, including bitcoin's, devour large amounts of energy, sparking criticism from some investors and environmentalists.

The Ethereum Foundation, a prominent non-profit organisation that says it supports Ethereum, says the upgrade will pave the way for further blockchain updates that will facilitate cheaper transactions.

HOW BIG OF A DEAL IS THIS?

Ethereum backers say the Merge is a monumental moment for the $1 trillion crypto sector.

Proponents believe the Merge will make Ethereum more favourable compared to arch-rival bitcoin - the world's top cryptocurrency - in terms of price and