Ethereum, Merge and Beyond - web3 with a16z crypto  ## Metadata - Author: **web3 with a16z crypto** - Full Title: Ethereum, Merge and Beyond - Category: #podcasts - URL: https://share.snipd.com/episode/bafd089d-7514-4683-9cd0-7843f9f4cdee ## Highlights - Ethereum: A Decentralized Platform for Building Applications Key takeaways: • Ethereum is a blockchain that is decentralized and censorshipresistant, but can still accommodate a large number of users and a wide range of use cases. • Recently, Ethereum has been working on transitioning from proof of work to proof of stake, which is known as the merge. Transcript: Speaker 2 Us. Im out a little bit. Were trying to build with a theorium is really a block chain tha's like as decentralized and censorship esistent as possible, but at the same time to do that in a way that can accommodate Speaker 1 A large number of users and a wide range of use cases. And this is probably like the two main differences whoudh say, something like bit coin, which also is quite a line, like a values perspective, with regards to how they build the software Is ethereum is willing to allow more expesability in terms of what's being built through the e v m, obviously. And also has this road map where we would like to scale the chain beyond levels, where like every single note on the network verifies every single bit of data, but still maintain very High security properties around that and relatively low hardware and bandwich requirements to run a note on the network. So that's kind of like a very high level view. And then the big thing we've been working on as part of that recently is transitiong from proof of work to proof of stake. Whit's known as the merge. ([Time 0:02:30](https://share.snipd.com/snip/6414d8ba-d239-40cd-9259-6693b403a55a)) - Ethereum: Migrating from Proof of Work to Proof of Stake Key takeaways: • Ethereum is planning to transition from proof of work to proof of stake, in order to improve security and reduce hardware requirements. • This transition is being done in an isolated environment, to ensure that any issues with the switch don't affect the main network. Transcript: Speaker 1 And also has this road map where we would like to scale the chain beyond levels, where like every single note on the network verifies every single bit of data, but still maintain very High security properties around that and relatively low hardware and bandwich requirements to run a note on the network. So that's kind of like a very high level view. And then the big thing we've been working on as part of that recently is transitiong from proof of work to proof of stake. Whit's known as the merge. Speaker 2 So this idea with the merge is that ethereum currently has a proof of stake chain that's live, that's testing the soundness of this design in production. Speaker 1 And all the applications are running on another chain that's under proof of work. The reason for this is that we wanted to launch the proof of stake chain in an isolated environment, so that if it had any issues, it wouldn't effect applications and people's funds on The main network. Speaker 2 But not that we've seen it run for quite some time, we were confident in migrating towards that as the way to secure the network. Speaker 1 And so we basically go from using proof of work as the consensus mechanism to etherium to using proof of stake. And the neat kind of soft ware trick that allows us to do that is ([Time 0:03:07](https://share.snipd.com/snip/573c19ee-6e94-4c55-96ff-6ee00da82e93)) - The Pros and Cons of Having a Large Community Key takeaways: • The upside of having a complex system is that it is able to adapt to changing conditions. • The downside is that it is more difficult to make changes, and there is a greater risk of breaking the system. • The community is important in ensuring that changes are made that are worth the risk. Transcript: Speaker 2 You can't really trust itlike a settlement deathwork any more. Speaker 1 So having these different clients ass he time of complexity, but that's the upside of it. Yet, are not ever relying on a single one of them. And the utter human part, i think, which slows down, is as the community grows, the amount of stakeholders grow. Speaker 2 And you can think of this is like etherum in its earliest stage is building like a tech product. Speaker 1 Writ you can merge, t master and ship things. Imagine the theorem pre genesis. You can make changes incredibly quickly. And even when a theory i'm launched, obviously you need some coordination to ship things, but there's kind of nothing at stake on the platform, like there's no applications built to Value as minima. If there's a bug, there as som the end of the world. If you look at a theorem, to day we have on the order of hundreds of billions of dollars of economic value, on ths, trillion seloling per year. So if this thing breaks, the impact is quite big. But even beyond that, to make changes to this, you need the community to sort of agree and believe that those changes are worth it. Speaker 2 And unfortunately, were. We're kind of at the point where there's no more really low hanging fruits, right? If there's something that's just like a pure wind, we'll do it. Speaker 1 It won' be contentious. It'll make things better, and no one will agree with that. The point whereat now is like, there are trade offs, right? ([Time 0:21:51](https://share.snipd.com/snip/b3229127-cc3c-413d-b76d-b2cd841b4a68)) - Ethereum's Shadow Fork Testing Process Key takeaways: • The team is confident that their speck product is feature complete and ready for public testing. • They are testing their product by shadow forking mainnet. • This is important because it allows them to measure the size and state of the mainnet. Transcript: Speaker 2 Like our assumption was that they wouldn't break, you know, oune swap and infera and makeher and all that. But you're like, ok, can we get them to deploy a version of uty swamp on this? And not even just a smart contract working, but all the connections between the u i and what not? Speaker 1 So we did all of this in early winter. We found these edge cases in the speck, fixed them. And in march, we had another public test net where we basically hav, i wouldn't call i a speck frozen, but definitely like feature complete. So we launched another test nent with that. And then we started moving from mostly fixing specification level issues o fixing implementation level issues. Again, we weren't like, a hundred % confident plik. We had high confidence tat like to speck with sound. But we would find issues w, you know, many of the implementations in specific edge cases. Speaker 2 And the new thing we started doing to test this is this idea of shadow forks. And on a high level, what we do is we have all the clients and testing teams take notes, tell them to merge as happening, and run them like a mainnet. Speaker 1 So they basically fork off mainnet with a small number of notes, and they run through the merge, and they hopefully make it on the other side. Speaker 2 And the things that are nneed about that is you get the state size and data base size of mainnet. Speaker 1 And people tend to think that block chains are bottle necked by the amount of transactions per second. This is not true. Speaker 2 The thing that bottle necks block chains, i specifically ethereum, is the amount of contracts and addresses that exist. Speaker 1 We call this the state, everybody's address, all the smart contracts, all the data and that. And this is why, like, main net is much harder. ([Time 0:29:21](https://share.snipd.com/snip/f734b6f5-4171-4836-b9ee-b07b75721eeb)) - The Merger Doesn't Reduce Transaction Fees on Ethereum Key takeaways: (* The merge will not reduce transaction fees on Ethereum., * There are other benefits to the merge, such as getting consensus on the last valid block in the chain.) Transcript: Speaker 1 And again, it really depends the type of thing you're looking for. But we do simulations, but we aught to do like a ton of fuzzing, which is really helpful, and basically running through, like, evry potential in puts. And what we'll do will fuss different clients against each other and compare the outwat cycl we'll do a lot of that. Speaker 2 The thing is, for some properties of the etherea mannet, people talk ot simulating the latency the notes and what not all the time, but i don't know, it's like the shatow forks just so far have been better. I'm not like an engineer. I can't tell you, like, why exactly, why is it so hard to simulate it? Speaker 1 That's well, but i'm sure, i u same will figure out a good way to do itd it'll workbuti don't know why. The thetleforks have been working like surprisingly well. Speaker 3 No, that's great. Not yet. No, i want to probe on this to some point in the future. Is theren't just one quick misconception you want to tackle about the discourse around the merge? Like a common misconception that people have that you just want a bottom line for the audience. Speaker 1 You know, the biggest one we see is like that the merge will reduce transaction fees on etherium at a high level. It unfortunately doesn't. There's a bunch of other things that a theorem is doing the lower transaction fees. But the merge is really just moving from proof of work to proof istake, to get the consensus on what's the last valid block in the chain. ([Time 0:53:09](https://share.snipd.com/snip/368e9555-55b4-480c-8cc9-e30c0de7ca44))