Introduction
The second-largest blockchain network, Ethereum, has finally finished switching to a new mechanism for handling transactions after encountering numerous delays.
The significance of it all, however, has come under scrutiny due to fluctuating deadlines, abandoned goals, and conflicting statements from Ethereum’s key developers.
So, what should you know about The Merge is Complete: Ethereum? Will ETH fess decrease? Is it a good approach?
In this post, we had the answers to these and other queries. Continue reading to learn more about this transition.
Ethereum Merge – Image source: Flickr
The Merge is Complete: Ethereum – All You Need To Know
The Merge indicates the Ethereum network’s transition from Proof-of-work (PoW) to proof-of-stake (PoS) for crypto transaction authentication.
The Ethereum Foundation compared Ether to a spacecraft in mid-flight to describe this change. The community constructed a more durable hull and a new engine. After extensive testing, it’s almost time to replace the old engine with the new engine. By doing this, the old ship will incorporate the new, more effective engine.
What was the problem with the old machine? Since the network’s launch in 2015, the Mainnet blockchain has employed a technique known as proof-of-work to add new contracts and other information safely. PoW demands traders’ computers to solve increasingly difficult calculations before they can generate a new block and collect cryptocurrency rewards, known as mining. Although secure, mining consumes a lot of energy. The network used as much energy annually as some nations did during the same period.
Proof-of-stake is a more energy-efficient approach. Users wishing to participate in the authentication process stake their own bitcoin. It is a procedure known as staking, which powers computational power.
The Beacon chain, which coexisted with Ethereum’s original Mainnet platform for almost two years, served as a testing ground for the Merge algorithm. The Mainnet data was moved to the Beacon chain during the transition as a “mid-flight rocket engine swap.”
More scalability, privacy, and sustainability made the new system a very exciting step in bringing the network goal to life.
When Did the Ethereum Merge Happen?
The Merge was planned to go into effect after the “total terminal difficulty,” or real trouble of all mined Ethereum blocks, reached a set quantity rather than a specific date (TTD).
At 1:42:42 EST on September 15, the changeover occurred at block 15537393. Except for one minor issue, nothing major happened. Some investors referred to the merge events as the best situation.
Before the event, the price of ETH, the second-largest crypto after bitcoin (BTC), stayed basically unchanged. Its current market worth is close to $200 billion.
About Ethereum 2.0
The ETH 2.0 blockchain is an update to the Ethereum blockchain. In this version, mining won’t be necessary. Instead, stakeholders will secure the network. Also, this will allow more people access to the act. Due to Ether being one of their major revenue sources, mining pools have already taken precautions. It ensures that their income is at least somewhat secured during the changeover. Several are currently focusing on Raven Coin and ETC (RVN).
The PoS mechanism will improve the security and scalability of the network. It also adds a new set of incentives for those in charge of these computers to adhere to the regulations as specified. Therefore, it secures the ledger from any unauthorized tampering.
Ethereum 2.0 – Image source: Flickr
Why Does Merge Matter?
Many people consider the Merge a turning point in the evolution of cryptocurrencies because of the potential material and philosophical repercussions.
This milestone might also boost market confidence and infuse some much-needed confidence after periods of market uncertainty caused by factors like inflation and increasing interest rates, among others. A joining like this is also extremely unusual in cryptocurrencies and might never occur again.
Effects of The Merge
First and foremost, the transition from a proof-of-work (PoW) to a proof-of-stake (PoS) system will cease mining. Energy-intensive computers won’t have to create or mine more Ether. This will result in a 99.95% reduction in the energy used by the network.
This increase in energy effectiveness might benefit the industry. Corporate adoption might quicken if the merger goes smoothly, especially among organizations with (ESG) objectives.
According to Joe Lubin, a co-founder of Ethereum and the blockchain startup Consensys, many “big financial institutions” have all been waiting until the merger to get “seriously involved” in the system.
As you may know, due to its expensive fees and traffic, many additional potential users have shied away from Ethereum. Although the Merge won’t get rid of those fees, the developers claim it will pave the way for introducing new technologies that will help the network scale.
Additionally, according to the coin developers, moving to Proof of Stake will boost safety and make the system more resistant to attacks. It now hosts a $60 billion network of cryptocurrency exchanges, financing companies, non-fungible token (NFT) marketplaces, and other apps.
The Merge reduces energy consumption – Image source: Flickr
Ethereum Price After The Merge
In general, ETH’s price and the whole cryptocurrency market have remained unchanged. Future network improvements, such as danksharding and proto-danksharding, may reduce ETs high connection fees. But the earliest point that these improvements will arrive is 2023.
Analysts predict that the PoS system will demonstrate its benefits in the upcoming months as it contributes to making Ethereum more and morr. The Merge does not specifically address concerns about speed and transaction costs. Yet, it does lay the groundwork for improvements in the future that will. Other methods, such as Layer 2 scaling approaches, can help with those issues.
In the long run, not everyone can forecast what will occur to the value of the ETH token. The market may have already factored in the upgrade. Additionally, there is a slight chance that the new system will encounter problems. Or the PoS will ultimately turn out to be less reliable than PoW.
The Bottom Line
The Merge is Complete: Ethereum is the official merging of Ethereum’s PoW blockchain to its new PoS Beacon Chain.
This upgrade lays the framework for future Ethereum network enhancements. In the long term, this could be a “positive catalyst” for ETH.