The Ethereum Merge is completed

The idea of a blockchain is that you want to do bank transfers without a bank. You want people to be able to do transactions, and have them confirmed, and have there be some canonical agreed list of the transactions, but you don’t want to trust some central party to do it.
At a high level, the blockchain solution is to confirm transactions by letting everyone keep a copy of the transaction ledger. And then the official ledger is based on consensus among people who have some demonstrated stake in the system.
What that has often meant in practice — what it means in Bitcoin and what it originally meant in Ethereum — is “proof of work.” What you do is, you buy a bunch of computers, and you set them to work solving meaningless math problems, and whoever solves the most math problems the fastest gets to confirm a block of Bitcoin transactions, and they are rewarded with some newly minted Bitcoins and then everyone starts over solving more math problems to confirm more transactions. Buying the computers, and paying for the electricity to run them to solve the
math problems, demonstrates your commitment to Bitcoin: It would be crazy to spend all that money on computers and electricity to confirm fake transactions, which would undermine the value of Bitcoin and thus of your investment. This is called “mining”: You spend money on computers and electricity, and then you are rewarded with newly created Bitcoins. And there are people, and publicly traded companies, who are in the business of Bitcoin mining and thus of maintaining the Bitcoin network. The inputs are electricity and the outputs are Bitcoin.
This was a clever innovation and has some important benefits. It lets you have a ledger that is maintained by people with incentives to do the right thing — people you can trust — without knowing who they are.
There is no pre-approved list of people who are allowed to maintain the Bitcoin ledger; anyone who buys enough computers and electricity can participate. It is permissionless. But because they have to buy all those computers and electricity, they have good incentives to maintain the ledger in a good way.
But there are some problems. The biggest is that
it uses a ton of electricity solving pointless math problems, which seems wasteful both in environmental terms and also in economic terms.
Developers of later blockchains realised that, if the point here is to have transactions confirmed by people with a demonstrated stake in the system, there are easier ways to demonstrate a stake in the system.
If you have a lot of Ether, you can stake them and be a validator and confirm transactions and get rewarded with additional Ether.
Or, if you have a smaller amount of Ether, you can delegate them to a validator: You hand them over to some validator that you trust, and that validator can stake them and confirm transactions and get rewarded with additional Ether and give you some of them. In practice, it is natural for big crypto exchanges like Binance, Coinbase and Kraken to be in this business: They are holding on to people’s Ether for them anyway, and they have a big economic interest in Ether working well.

—Bloomberg