The Ethereum merger will take place in September, eliminating one of the most serious problems with many blockchains, especially the impact on the environment, and paying more attention to the issue of scaling to ensure more transactions with minimal commission. The market leader of decentralized deposit applications is Ethereum, the second largest cryptocurrency. When the average commission reached $50 in November 2021 as a result of increased transaction volume, the network faced scalability problems. Because of this, the Ethereum merger is an important step towards creating a fully functional scalable solution.
The Ethereum blockchain will face a sharp decline in post-merger issuance as it transitions to a new point-of-sale consensus mechanism. As a result, there is a possibility that the ether supply may begin to decline. After the merger, the mining speed of the new ether will drop by about 90%, since the verification fee will be much lower than the incentive for POW miners.
Negative aspects of ETH POW.
ETHPoW Proof-of-work (PoW) and primary Proof-of-Stake are branching into BOTH, a potential new chain supported by Ethereum (PoS) miners.
The three main reasons why Ethereum PoW tokens will not be widely used and risk being sold on launch day are as follows.
Oracle support will not be available for PoW. In an official statement, Chainlink announced that its services will continue to operate on the Ethereum Post blockchain, which is supported by the Ethereum Foundation.
Most applications on ETHPoW will not have Oracle support.
The two most popular stable currencies, USD Cad (USD) and Tether (USDT), have officially announced that they will only support Ethereum 2.0 (PoS), developed by the Ethereum Foundation.
Since not as many developers will work on ETHPoW as on Ethereum Classic, all the best of them will remain in the Ethereum Foundation.
Due to the fact that their assets were frozen, users lost faith in ETHPoW. In order to secure users’ funds after the hard fork, the EthereumPoW (ETHW) team announced that it would temporarily freeze coins in certain DeFi application liquidity pools.
Forks in Ethereum.
According to CoinGecko’s co-founder, a number of PoW-based Ethereum forks are expected.
The creator of the cryptocurrency aggregator CoinGecko Bobby Bong expects that in light of the upcoming merger of the Ethereum network, new forks of ETH may appear. As with bitcoin in 2017, he predicts that several new currencies could be launched simultaneously.
Everything you need to know about the Ethereum Merge.
What is “Merge”?
“Merge” is Ethereum’s long-awaited transition from its current “proof-of-work” system to “proof-of-ownership.” “Merge” will take place in two phases, which have been dubbed the Bellatrix and Paris updates. The “Merger” was officially launched with the Bellatrix update, which took place on September 6, 2022 at 11:34:47 UTC. Bellatrix is a consensus-level network update. Bellatrix will be followed by the Paris update, which deals with the execution layer. It will move the Ethereum blockchain from proof-of-work to proof-of-ownership. The Paris update will be activated by a certain threshold of total complexity, called cumulative network complexity to the requested block (TTD). The actual date of Paris is not yet known because it depends largely on the hashing rate of the proof-of-work algorithm. TTD is the cumulative complexity threshold required to mine the final block in Ethereum. In other words, TTD is a fixed number of hashes left to be found before an official transition to proof-of-work ownership.
What happens immediately after the merger?
Once completed, the already working Beacon Chain will take over the process of validating new transactions using proof-of-ownership, and Ethereum will abandon the former “proof-of-work” algorithm for good. To date, validators have already put more than 13 million ETH into the Beacon Chain. The main Ethereum blockchain network will merge with Beacon Chain, with the merger affecting the entire transaction history in Ethereum, including every transaction, smart contract and balance since July 2015.
What is the importance of the Merger?
“The merger has been in preparation for six years, and many consider it a milestone in cryptocurrency history because of its potential material and ideological implications. This key milestone could also boost investor confidence and give the market much needed optimism after months of volatility caused by inflation and rising interest rates, among other things. As one commentator put it, the “Merger” in Ethereum “will prove that a decentralized and publicly available network can work in an energy-efficient way. Furthermore, such a merger is an incredibly rare event in the cryptocurrency world and may never happen again.
How will the Merger affect me and my ETH?
The short answer is: almost nothing. According to the plan, the Merger should go unnoticed for users. Coinbase will briefly suspend some token deposits and withdrawals as a precautionary measure, particularly the new Ethereum (ETH), ERC-20, Polygon (MATIC), Optimism (OP), PWETH, PUSDC and PMATIC tokens, but otherwise we do not expect any other networks or currencies to be affected. However, those who have sent their ETH to Stacking will not have their balances unlocked immediately after the Merger, and they will not yet be available for trading or transfer. It is expected that ETH sent to Stacking will be unlocked and become available once the Ethereum protocol completes an update. Current estimates are that this update will be completed in early 2023. Stay tuned!