Ethereum developers today executed the “Merge,” an upgrade that eliminates mining and dramatically reduces the energy consumption of the world’s second-biggest cryptocurrency. Today’s action “completed Ethereum’s transition to proof-of-stake consensus, officially deprecating proof-of-work and reducing energy consumption by ~99.95 percent,” the Ethereum.org Merge page said.
The Ethereum blockchain has existed since July 2015, and planning for today’s change has been in the works for several years. Because a botched transition could have caused chaos, Ethereum developers over the past year have “repeatedly pushed back the date of ‘the Merge’ to give themselves more time to prepare,” as Ars writer Timothy B. Lee previously wrote in a detailed feature on the transition. The Merge will “put the world’s Ethereum miners out of work,” as the new system doesn’t require the powerful graphics cards previously needed to maintain the blockchain and create new ether, Lee wrote.
The switch was highly anticipated. “When the Merge officially kicked in at 6:43 a.m. UTC, more than 41,000 people were tuned in on YouTube to an ‘Ethereum Mainnet Merge Viewing Party,'” CoinDesk wrote. “They watched with bated breath as key metrics trickled in suggesting that Ethereum’s core systems had remained intact. After about 15 long minutes, the Merge officially finalized, meaning it could be declared a success.”
Before the Merge, Ethereum’s annualized power consumption was comparable to the country of Chile’s, and its carbon footprint was similar to Hong Kong’s, according to Digiconomist’s Ethereum Energy Consumption Index.
The ether price was down almost 9 percent today as of this writing, while bitcoin had dropped about 2.4 percent.
No more mining
The official Ethereum website explains that the Merge “was the joining of the original execution layer of Ethereum (the Mainnet that has existed since genesis) with its new proof-of-stake consensus layer, the Beacon Chain. It eliminated the need for energy-intensive mining and instead enabled the network to be secured using staked ETH.”
The Beacon Chain was created in December 2020 “as a separate blockchain to Mainnet, running in parallel.” After a lot of testing, it was ready to take over.
“The Beacon Chain was not originally processing Mainnet transactions. Instead, it was reaching consensus on its own state by agreeing on active validators and their account balances,” the Ethereum.org merge page says. “After extensive testing, it became time for the Beacon Chain to reach consensus on real world data. After The Merge, the Beacon Chain became the consensus engine for all network data, including execution layer transactions and account balances.”
Now that the change is complete, “mining is no longer the means of producing valid blocks. Instead, the proof-of-stake validators have adopted this role and are now responsible for processing the validity of all transactions and proposing blocks.” The joining of Mainnet with the Beacon Chain “also merged the entire transactional history of Ethereum,” so no history was lost in the process.
The change should be seamless for people who hold ether. Funds will still be accessible without any user action. “There is no such thing as ‘old ETH’/’new ETH’ or ‘ETH1’/’ETH2’ and wallets work exactly the same after The Merge as they did before—people telling you otherwise are likely scammers,” the Ethereum project said.
Less ether will be issued
Another Ethereum.org page explains how the issuance of ether will change post-Merge and why less ether needs to be issued:
Validators on the Beacon Chain are rewarded with ETH for attesting to the state of the chain and proposing blocks. Rewards (or penalties) are calculated and distributed at each epoch (every 6.4 minutes) based on validator performance. The validator rewards are significantly less than the miner rewards issued on proof-of-work (2 ETH every ~13.5 seconds), as operating a validating node is not an economically intense activity and thus does not require or warrant as high a reward.
By contrast, “mining is an economically intensive activity, requiring high levels of ETH issuance to sustain,” the page says. Before the Merge, mining rewards totaled about 13,000 ETH per day, and rewards for staking were 1,600 ETH per day.
“After The Merge, only the ~1,600 ETH per day will remain, dropping total new ETH issuance by ~90 percent,” the page says. To participate, “validators explicitly stake capital in the form of ETH into a smart contract on Ethereum,” according to the proof-of-stake explanation. “This staked ETH then acts as collateral that can be destroyed if the validator behaves dishonestly or lazily.”
A validator must deposit 32 ETH into the deposit contract and run software including an execution client, a consensus client, and a validator.
“Whereas under proof-of-work, the timing of blocks is determined by the mining difficulty, in proof-of-stake, the tempo is fixed,” the proof-of-stake page says. “Time in proof-of-stake Ethereum is divided into slots (12 seconds) and epochs (32 slots). One validator is randomly selected to be a block proposer in every slot. This validator is responsible for creating a new block and sending it out to other nodes on the network. Also in every slot, a committee of validators is randomly chosen, whose votes are used to determine the validity of the block being proposed.”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
