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The Revolutionary Ropsten Merge
Ropsten, a testnet blockchain, transitioned from Proof of Work to Proof of Stake, paving the way for Ethereum to do so soon.
Yesterday, something historic happened. The Ropsten testnet blockchain successfully transitioned from Proof of Work to Proof of Stake, a change planned for Ethereum itself later this year that will greatly reduce its power consumption. Given Ropsten is a testnet chain, currency on it is not considered “real,” with developers seeking to test Ethereum-compatible smart contracts typically seeking out “faucets” that give out free test crypto. But it serves as an important proof of the possibility of what is to come — a change never done on a major chain before.
Crypto has a reputation of being bad for the environment. The concerns are not entirely baseless but largely are built atop an expectation that Proof of Work-style mining is an intrinsic part of blockchains. With this method of validating transactions, all the nodes on the network race to validate each transaction. The arm’s race this creates incentives people hooking up ever-increasing amounts of computational power, scooping up silicon like cutting-edge graphics cards to maximize their performance per penny spent.
But this is not necessary for a blockchain to function. In simple terms, a blockchain is just a bunch of “blocks” of data and code like smart contracts that are “chained” together where each block validates the contents of the block preceding it. Proof of Work is a highly secure and, comparatively speaking, easy way of reaching a consensus about new blocks in a decentralized way. However, because of the aforementioned arms race, in the case of big chains like Bitcoin and Ethereum, it leads to extremely high power consumption.
In the case of Proof of Stake, validators are instead randomly selected for each block. To ensure there is significant disincentive to trying to attack the system, validators put up a large amount of cryptocurrency — their “stake” — that will be taken if the system determines they are sending bad data. Not only does this ensure a relatively small number of chips are working on each transaction, it removes the need for them to be cutting-edge.
Proof of Stake is an already widespread technology, even used in a lot of chains that are part of the broader Ethereum ecosystem like Polygon. There was never any doubt it was a functional and robust way to form consensus about transactions. But all major Proof of Stake chains in existence were created as such. What was critical here was not proving that Proof of Stake works, but that a chain already in active use could be converted to use it — that Ethereum could do the long awaited “Merge.”
This transition of a test chain is just the first of a few that will follow in the coming weeks. While the currency on these chains is not considered “real,” the way they function is identical to a real blockchain. When trying something new in an NFT collection, I always deploy the “smart contract” — the code that governs how the assets behave on-chain — to a testnet chain first to ensure it works as I expect. The value of test chains is predicated on how well they simulate the real thing. The only thing making them not “real” is a social consensus that they are not — a consensus about our technologies of consensus.
Many who are critical of web3 and NFTs base their criticism around the idea that Ethereum will never go Proof of Stake, given it was initially planned a few years ago. However, a few years of delays does not mean the only outcome is more delay. What we are witnessing now is a culmination of all of those efforts. The process is established, it just makes most sense to do it to these test chains first — it is, after all, another form of blockchain testing.
Though a lot of NFTs are already on Proof of Stake chains, Ethereum transitioning to it will eradicate the environmental concerns critics constantly lob at creators in this space. While critics will undoubtedly double down on other misguided blanket criticisms of anything blockchain-related, it was the one criticism that — at least to me — has real weight. Shouting “scam” or “ponzi” at a cute cartoon never promised to be worth anything rings hollow, but we do need to focus on how we can bring the carbon impact of industries down in order to combat climate change.
While the immediate impacts may be small, we have entered a new era — one in which power-hungry chains like Ethereum can provably be made far more efficient. Proof of Stake was always in wide use, but transitioning to it after a chain’s creation is important new ground. Blockchains are going to play an increasingly significant role in technology in the coming decades, and it is exciting that the space continues to evolve. Ropsten going Proof of Stake is the sign that heralds the season of The Merge.
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