Awesome People Ep - 92
Technical Product Manager, also wtf is the Merge? Hot takes.
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For this week’s star👇
Please meet Akhila, Your Web3 Technical Product Manager ✨
I met Akhila when she applied to our talent collective. I reached out because she was formerly an Ethereum Core Developer and I wanted her take on the ecosystem. Most recently, Akhila worked at Coinbase for 2.5 years and launched Coinbase Prime APIs. Prior to that, she was a Founding Engineer for Teku, the Java Ethereum consensus client. Over the course of her career, she’s won a Lightbulb Award from Coinbase and the Eugene Lawler Prize from UC Berkeley. Outside of work, Akhila is an avid traveler. She’s been to 48 countries and 6 continents — many of those solo!
She's trusted by Coinbase, ConsenSys, Google, and Apple.
You can hire her as a Product Manager. She’s also available for speaking engagements on Ethereum.
Want an intro to Akhila? Respond to this email and I’ll connect you!
Akhila was gracious enough to explain wft is the Ethereum merge and why we should care 🤩
The Ethereum merge, also known as The Merge, is the upcoming update for the Ethereum blockchain. The merge will increase the number of transactions from ~15 to 100,000 per second. That’s 6666x more transactions per second! It will also make Ethereum ~99.95% more energy efficient, 10% faster, and more secure. This will enable a much more scalable Ethereum blockchain.
The Merge is set to ship later this year in Q3/Q4 2022.
Here’s what you need to know about why it’s important.
Today, the Ethereum blockchain uses Proof of Work. After The Merge, the Ethereum blockchain will run on Proof of Stake.
What is Proof of Work and Proof of Stake?
I’ll use an example to explain.
Let’s say you send an NFT you own to a friend. How does this work under the hood with Proof of Work vs. Proof of Stake?
I promise this is all simpler than it sounds. Stick with me here.
Proof of Work
Ethereum operates on a concept called mining. Mining is the process in which new data is added to the blockchain. Participants who mine are called miners. Miners race to solve a complex math puzzle in order to add a new block to the chain.
The first miner to solve the puzzle is rewarded ETH and their block is added to the blockchain.
When you initiate an NFT transfer, each miner creates a block and competes to add it to the blockchain. The miner that wins the math puzzle gets ETH, and your NFT is successfully sent to your friend.
Proof of Stake
Post-merge, Ethereum will operate on staking, instead of on mining. Participants in Proof of Stake are called validators. Proof of Stake requires validators to deposit 32 ETH onto the blockchain. The validators lose their deposit of 32 ETH if they are proven malicious.
In Proof of Stake, when you transfer your NFT to a friend, a random validator is chosen to create a block that includes your transaction. Other validators need to verify it before it gets added to the blockchain. Once it passes the approval phase, the block is added to the blockchain and your NFT is successfully sent to your friend.
Why not Proof of Work? And why Proof of Stake?
Below are estimates of the annual energy consumption in TWh/yr for various products. You can see ETH Proof of Work in purple and ETH Proof of Stake in grey (on the far right)
Proof of Work requires specialized hardware to compute math puzzles. It’s expensive and energy-intensive. Every miner uses energy to solve each puzzle, even though only one wins.
Proof of Work is more centralized than Proof of Stake. Specialized hardware is expensive. Miners are centralized since it’s cheaper to buy machines in large quantities. The rich get richer since the pool of miners is small.
With Proof of Work, there are no penalties for bad actors or malicious behavior. Although the chance of a bad actor being able to tamper with a new block is low, there isn’t a system in place that penalizes them financially or prevents them from doing it again in the future.
Proof of Stake will be able to process many more transactions per second than Proof of Work. Currently, Proof of Work processes on average 15 transactions per second. Proof of Stake will be able to process up to 100,000 transactions per second.
The case for The Merge
Why is the merge important? Ethereum has the biggest user base. Ethereum’s major scalability issues and environmental issues need to be addressed asap. The merge will enable Ethereum to retain and onboard more users.
From early 2017 to mid 2021, the Ethereum blockchain network was overloaded. The network couldn’t handle the community load. This caused undesirable UX issues, such as lengthy transaction wait times and volatile transaction fees (gas). With Proof of Stake, the wait time for your transactions will be shorter.
The Merge will also reduce Ethereum’s energy consumption by ~99.95% and will enable better security for Ethereum users through the concept of finality.
All transactional history from Ethereum on the Proof of Work mechanism will be retained, no need to worry.
The Merge is exciting because it’ll align the implementation of the Ethereum blockchain with the goals of the original vision, with decentralization at its core.
Need a PM? Respond to this email and I’ll connect you Akhila!
As always, please let me know if you have any questions and if you want an intro to Akhila!
Stay awesome,
Founder of Awesome People Ventures & Talent
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