The merge is coming!!
The most widely used blockchain platform in the world is going to go through a significant transformation that will make it greener and open the door for numerous improvements.
Although it’s crucial for the developing fields of decentralized finance and NFTs, its immediate implications on Ethereum’s speed, scalability, and fees are sometimes exaggerated.
A huge Crypto event is about to happen after several months of delays and rearranged plans. Ethereum, the second-largest cryptocurrency, is fundamentally changing how its system is created and run in order to be more scalable and energy-efficient.
Let’s dive in.
The Ethereum Merge
Scaling is one of the important criteria Ethereum has set for the Merge. The improvement will allow the blockchain to process 10,000 transactions per second, according to the CEO of Ethereum.
The Merge is the first of five goals the team has set for its next initiatives. The five stages are as follows:
- The Merge: Here, the emphasis is on the switch from proof of work to proof of stake. It describes how the Mainnet of Ethereum and the Beacon Chain came together.
- The Surge: The group hopes to incorporate sharding into the protocol in the later stages. The main network will be split up into smaller units known as shards as a result of this scalability approach. The method will reduce the computational load now placed on the mainnet.
- The Verge: The idea of “verkle trees” is introduced at this phase. Upgraded Merkle proofs are included. The phase will aid ETH node operators in having more data storage space.
- The Purge: It has to do with validators’ data storage. The upgrade will work to reduce the amount of hard drive space that the validators need. The procedure will aid in clearing up network congestion.
- The Splurge: This last upgrade aims to bring a series of enhancements that will improve the network’s general usability.
What to do Ahead of The Merge
You don’t need to take any action if you already have Ethereum or an ERC-20 token (the cryptocurrencies that use the Ethereum network), whether they are stored in a software wallet, hardware wallet, or an exchange.
Ethereum should continue operating normally after the changeover if all goes according to plan, with no downtime.
Although this isn’t for you if you run an Ethereum node, you can find instructions on what to do here.
Things to Expect Following The Merge
The reduction in energy use for Ethereum is one of the most significant advancements. And this is an area where cryptocurrencies have received harsh criticism (justly so), as the proof-of-work methods, which are still utilized by Bitcoin, need astronomically high energy consumption.
However, according to the managers of the cryptocurrency, Ethereum’s energy consumption will drop by around 99.95% if it switches to proof of stake.
Greater efficiency and scalability
Ethereum’s commercial partners may find it more useful if it is more effective and scalable. As a result, Ginzburg predicts that “mainstream payment networks and processors, finance and asset exchanges will experiment more aggressively putting their businesses on the chain.”
The value of Ethereum 2.0 may potentially be significantly impacted by The Merge, which is something traders are extremely interested in learning about.
According to Aaron Samsonoff, chief strategy officer and co-founder of InvestDEFY, a producer of structured crypto products, “Ethereum is positioned to become deflationary following the Merge.” After the shift, he predicts that the issuance of new Ethereum tokens will fall by about 90%.
Significant Shift in Graphics Cards
Graphics cards, which are essential to the proof-of-work protocol, may undergo significant change as a result of the switch from proof of work to proof of stake. According to experts, Ethereum miners will flood the market with their graphics processors, which will cause prices to drastically fall.
Rising Staking Rewards
As a result of decreasing supply and stable or increasing demand, a deflationary currency will often appreciate in value. The price of Ethereum may also be under pressure from other supply problems.
Samsonoff anticipates increasing staking benefits for individuals who stake their coins, which will result in more coins being retained for investment and a reduction in supply. Additionally, he predicts increased institutional interest in Ethereum. When you add it all together, it seems to suggest that the value of digital money will increase.
Popular Questions About the Merge
Will Eth Merge Lower Gas Fees?
Because it won’t expand network capacity, The Merge won’t necessarily lower gas fees. Instead, the consensus algorithm would change. However, gas taxes are presently the focus of the majority of layer-2 scaling solutions being created.
Will Eth Merge Increase Price?
Since the start of the year, Ether’s price has dropped more than 50%; many people think the Merge will bring it back. No one is certain how the Merge will impact the price of ETH despite the heated debate surrounding it.
Potentially, Ethereum’s POS update will attract new investors. Many think that this may have an impact on ETH’s price. But these are all just conjectures.
Despite this controversy, the price of ETH has considerably risen as the Merge date draws near. At the moment, it costs $1,896.53
Can the ETH Merge Fail?
The Ethereum Merge’s potential failure is one of the questions on people’s minds. The Ethereum team is optimistic that the upgrade will be successful, nevertheless.
The concern is that Ethereum “clients”—software that can read Ethereum data and mine blocks—may contain vulnerabilities that require months to remedy.
Developers are working hard to guarantee that validators can all operate together at merging time. The likelihood of failure is extremely low. But with cryptocurrency, everything is possible.
Will ETH 2.0 Replace ETH?
Ethereum 2.0 is less of a replacement for Ethereum and more of a merging. There won’t be a new coin created by ETH 2.0 to replace the existing ETH. Therefore, following the Merge, your old Ethereum coins won’t be useless. They could be moved to the Ethereum 2 network.