THE ETHEREUM MERGE
A paramount sort of event in the crypto industries took place recently and the crypto industries are never the same again. Too many new terms, and conditions, and all of this are for what? And Oh! Questions. Doubts. Whatnot. So here’s everything you need to know about the ETHEREUM MERGE.
What is the Ethereum that everybody keeps talking about?
Ethereum is a decentralized blockchain platform that establishes a peer-to-peer network where the execution takes place securely and safely. It verifies application code, also known as the known contracts.
Not only can Ethereum do what Bitcoin does which is to transfer money globally, but it’s also capable of much more – anyone can deploy code onto the network. And because it’s so flexible, any computer program can run on Ethereum.
Smart contracts are the rudimentary building blocks of the Ethereum applications. Smart contracts are pretty logical. A place where transactions and business functions can happen without trust — without intermediaries. Smart contracts on Ethereum put this vision into practice.
What is the Ethereum Merge?
The Ethereum Merge is the joining of Ethereum’s proof of stake (PoS) to transition the Ethereum blockchain off the legacy to the Proof of work (PoW) system.
That move, known as “the Merge,” is of huge consequence. Cryptocurrency doubters have always been a little skeptical, and perhaps argues quintessentially that coins like bitcoin and ether are useless and that they consume enormous amounts of electricity.
Ethereum’s switch to proof of stake has been planned since 2014 before the blockchain was officially deployed. Because of its technical complexity, and the increasingly large amount of money at risk, it’s been delayed multiple times.
Something important to know about Ethereum is that it’s used and trusted by many key crypto and metaverse players. It was co-founded back in 2013 by programmer Vitalik Buterin, a longtime crypto enthusiast who also helped launch the first serious crypto-focused magazine and gained early financial support for Ethereum from Silicon Valley kingmaker Peter Theil. (However, during this year’s Bitcoin 2022 conference, Thiel railed against Ethereum and claimed it was the “extreme opposite” of his beloved Bitcoin).
Buterin conceived Ethereum as a blockchain network that would have far more uses outside of just mining cryptocurrency, as with the blockchain Bitcoin operates on. Ethereum does have its currency, the megapopular coin Ether (or ETH), but its tech also hosts video games, prediction markets, and most of the NFTs in circulation.
How the Ethereum merge will affect crypto investors?
Ethereum is switching to a more energy-efficient method of substantial transactions that take place on the platform, known as proof of stake.
The current proof-of-work model requires enormous amounts of energy to power computers that race to solve complicated math equations to validate transactions.
As the number of transactions in the blockchains increases, the computational power required to solve those puzzles also increases—high computational power results in increased energy consumption.
The timeline kept getting delayed, causing observers to doubt this would ever come to fruition. It was only by December 2020 that Ethereum completed the first step, Phase 0, by building the Beacon Chain. The impending Merge, Phase 1, kept getting teased and delayed. Finally, last month, Ethereum developers offered Sept. 6 through Sept. 15 as the final deadline for the Merge’s emergence.
Opinions and Suggestions that were given by a few crypto investors after the Ethereum merge
Though this merge has been planned for a while, this might still come out as a shock to people, and here are a few facts entrepreneurs and investors have shared.
“The effect of this news has been speculated on Ethereum price as the prices have been falling for the last week by approximately 6%. Considering the situation, many exchanges including Unocoin have disabled Ethereum and Ethereum-based coins and tokens deposits and Withdrawals. As an advice to the investors, Ethereum and Ethereum-based coins and tokens might be highly volatile after this merger and any uncalculated risk might prove to be fatal,” said Sathvik Vishwanath, Co-founder & CEO of Unocoin.
“The Ethereum merge is a crucial step in the transition to proof of stake which will lay the foundation of future scalability improvements, while also significantly lowering the energy usage. There are no immediate gains like lower transaction fees but investors may benefit in the long run as it paves the way for future improvements in terms of costs and ecosystem development,” said Sumit Ghosh, CEO, and Co-Founder of Chingari, an on-chain social app. He also further added, “It is premature to determine how the merge will affect the Ethereum network, but it will undoubtedly have a significant influence on the whole crypto industry.”
“The spotlight is on Ethereum as it completes the biggest technology upgrade in recent years – the Merge. The momentous event is a culmination of months of meticulous planning and test runs that can be compared to the challenge of changing the engine of a 24-wheeler loaded truck while it is on the move. With a successful merge, Ethereum can await new investors as it transitions to this 2.0 version,” said Prashant Kumar, Founder, and CEO at weTrade.
A few Merge risks after the Ethereum merge
Not everything is unicorns and rainbows, my friend. Though the drastic change has taken over a heartbeat for all the investors in bitcoin and cryptocurrency, there are a lot of things to be thankful for because of this incident. Although, again, there are a few risks that you might need to be a little more concerned about.
People might be expecting a little too much after the event:
This is understandable given Ethereum is the second biggest crypto in the world and the switch to proof-of-stake is unprecedented.
And this merge is not going to address some of the biggest issues faced by Ethereum users. Ethereum’s price will suffer when people realize the much-hyped Merge won’t fix all the problems.
There may be a few technical challenges that nobody might be aware of:
Ethereum’s price could see significant volatility in the weeks surrounding the Merge. Taking a longer-term view, it’s important to consider the danger that Ethereum could slip from its position as smart contract crypto king. The most likely scenario is that a handful of programmable cryptocurrencies dominate rather than one player.
This is all you needed to know about the Ethereum merge. Geez sounds like a meteoroid clash isn’t it? But as it might have its safe ends and risks this however is helping the economy develop and also giving the crypto investors and users a boost. Various opinions, thousands of questions, and millions of solutions for each. As everyone might think “ It will all come around someday.” But, this much delayed, even more delay. A question for a question. But for now this adaption but be a little change until it becomes the new normal.
