VC Firm a16z: ‘Ethereum is a far superior blockchain now than it was before’

On September 15, the day Ethereum completed its merger upgrade, marking its transition from proof-of-work (PoW) consensus to proof-of-stake (PoS) consensus, the venture capital firm based in Silicon Valley’s Andreessen Horowitz (“a16z”), explained why “Ethereum is a much superior blockchain now than it was before.”

Around 07:00 UTC on September 15, the Ethereum Merge upgrade was complete:

Ethereum creator Vitalik Buterin called this successful update a “great moment for the Ethereum ecosystem”:

Andreessen Horowitz, which was founded in 2009 by Marc Andreessen and Ben Horowitz, is a venture capital firm that “backs bold entrepreneurs who are building the future through technology”. He claims he is stadium agnostic, investing in “seeds to venture into late-stage tech ventures, across bio+health, consumer, crypto, corporate, fintech, games and businesses that lean towards American dynamism”. a16z has “$35 billion in assets under management across multiple funds”.

In a blog post published on the day of the merger, Ali Yaha, a general partner of a16z, called the merger an “insane feat” since this upgrade “involved hot swapping the most important component of the architecture of Ethereum – its consensus mechanism – *while it was running*.” Yaha noted that “all of this happened while maintaining perfect availability for millions of users, thousands of decentralized applications (dapps), and hundreds of billions of dollars secure.”

Yaha then stated that some of the key benefits of moving from Ethereum to PoS consensus:

  • After the merger, Ethereum is now 100 times more energy efficient than before. Participating in consensus no longer expends the massive amount of electricity that PoW does. After The Merge, ETH’s power consumption will be comparable to that of web2 data centers.
  • PoS has direct access to each validator’s “stake”, the funds, or skin-in-the-game, that validators deposit to secure the network. This allows PoS incentives to be much more granular, further increasing security.
  • … anyone with 32 ETH can now participate as a validator on Ethereum.
  • On a PoS blockchain, transactions that go through consensus are final… The finality of transactions on Ethereum will lay the groundwork for future work that will improve Ethereum’s ability to scale (via “layer 2” solutions such as rollups), connect to other blockchains (via -chain bridges), and build better abstractions for developers that are easier to use and reason about.

He also mentioned that fusion is “a big deal” that “brings us closer to a world that benefits from an efficient and secure layer for distributed computing that can support the applications we all want to build.”

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