Remember last year, when Ethereum teased the coming of a new network upgrade called Ethereum 2.0? Well, the final stage known as the Ethereum Merge is almost here and from all indications, it’s going to be the crypto event of the year.
The Merge is Ethereum’s plan to switch from its current proof-of-work (Proof-of-Work) consensus mechanism to proof-of-stake (Proof-of-Stake).
It’s scheduled for Thursday September 15th . And already, many experts believe it could cause an increase in Ethereum’s price. But what is the Ethereum Merge, and why is it such a big deal? Let’s dive into the details.
What is the Ethereum Merge?
The Ethereum Merge is an exciting network upgrade that will allow Ethereum’s network handle a lot more transactions in a lot less time.
How Will the Ethereum Merge Happen?
To achieve this, the network will transition from proof-of-work (Proof-of-Work) to the proof-of-stake (Proof-of-Stake) consensus mechanism. Think of it as an update to your phone that adds new cool features. The only difference is that the Merge completely changes how Ethereum works.
Since it launched in 2015, the Ethereum blockchain has used the proof-of-work consensus mechanism. This means that miners would have to use huge mining rigs and hardware to mine ETH – just like Bitcoin.
But this mechanism has come with its own downsides. These include:
- The Ethereum blockchain handles 30 transactions a second. As more people use it, this transaction speed hasn’t been great.
- The blockchain consumes too much energy and everyone else is going green these days.
- Transaction fees have been really high the past few months.
The merge has already started and will combine the old Ethereum blockchain with the new one. There will be no more miners, and the network will continue to run with validators (or stakers).
How Will the Ethereum Merge Affect Ethereum?
Here are a few things the Ethereum Merge could do:
1. More Efficient Transactions
One of the Merge’s biggest benefits is an increase in the Ethereum blockchain’s efficiency. Remember:
- The Ethereum’s blockchain currently processes about 30 transactions a second.
- Proof-of-Staket-Merge, Ethereum is expected to handle up to 100,000 transactions a second.
- For context, the Bitcoin blockchain processes just 7 transactions a second. VISA and Mastercard process 1,700 and 5,000 transactions a second respectively
- So, if all goes according to plan, Ethereum should be quicker and more efficient.
2. A Reduced Supply of Ether
Ethereum co-founder Vitalik Buterin has also promised that the ETH supply will reduce after the Merge. What does this mean?
- The amount of ETH in circulation could drop by as much as 90%.
- This means that ETH will become scarcer. And as the laws of economics show, things become more valuable when they’re scarce.
3. Better Network Rewards
In proof-of-stake, network validators get incentives when they stake ETH. And the more you stake, the more you can earn. So, it’s one more reason to hold ETH.
What Will Happen to the Old Ethereum After the Merge?
Remember that the merge will combine two different Ethereum chains. Current ETH miners will lose their source of revenue because the new Proof-of-Stake chain won’t support mining.
It’s Proof-of-Stakesible that miners might want to make the most of the ETH they own on the old network. So, they could continue mining and validating transactions on the old blockchain. As long as this continues, the old chain will remain, and after the Merge, the blockchain will share ETH tokens between the new Proof-of-Stake chain and the old Proof-of-Work chain.
That way, you can make money by entering liquidity pools on the new network and still mining ETH on the old one.
How Can You Profit from The Merge?
You could benefit from the Ethereum Merge in the following ways:
- Buying Ethereum since it could become more valuable when it becomes scarce.
- Using popular ETH-based apps that exist on the Ethereum blockchain in case the increased Ethereum value transfers to them.
- Mining ETH on the old Ethereum blockchain
Are People Buying ETH Ahead of The Merge?
Investors have been splashing money on ETH and other Ethereum-based products ahead of the much-anticipated Merge.
According to a CoinShares report, ETH saw new investments of $16.3 million in the first week of September and $159 million over the previous seven weeks.
The ETH bull market has also seen the coin’s price go up to $1,605.82 (at the time of writing) – a 2.31% increase in the last 24 hours alone. Not bad, huh?
How the Merge Affects Your ETH on Quidax
- You won’t be able to send and receive ETH on Quidax during the merge.
- You WILL be able to buy and sell ETH on Quidax during the merge
What Are The Experts Saying?
Crypto experts have had their say on what happens after the Merge and what it means for the Web3 ecosystem.
If the Merge happens successfully, here are some things experts believe we should expect:
1. The Value of ETH Will Change
According to Lex Sokolin, the Head Economist at ConsenSys, the MErge should affect the value of ETH. The Merge will significantly affect everyone – individuals, developers, and businesses. So, it will definitely affect ETH’s value.
2. Ethereum May Overtake Bitcoin
Ethereum researcher Vivek Raman also made a bold prediction ahead of the Merge. According to him, ETH’s deflationary structure will make it scarcer than Bitcoin when the Merge is completed.
And with ETH’s new structure, the coin will have lower inflation. As a result, more people will buy and use ETH, and the coin could eventually overthrow Bitcoin as the biggest cryptocurrency in the world.
Market people even have a name for this – the Flippening.
3. The Merge Will Drive More ETH Adoption
According to a report from the Ethereum Enterprise Alliance (EEA), the Ethereum ecosystem will be more mature after the Merge.
This means that more businesses will be able to use it to solve real-world problems. Since it will consume less energy and be more scalable, more companies will adopt Ethereum for their business purProof-of-Stakees.
Final Thoughts
The Ethereum Merge is finally upon us, and we will see the Ethereum network switch from proof-of-work to proof-of-stake.
There have been different analyses and predictions about the future of ETH and its potential to become more valuable. However, note that these projections are only speculations. You shouldn’t take them as investment advice.
It’ll be exciting to see what lies ahead in the future of Ethereum. Interestingly, you can buy ETH and other cryptocurrencies easily on Quidax, even during the merge. All you need to do is sign up on Quidax and invest in the coin of the moment.
FAQ
Will Ethereum gas fees reduce after the merge?
No. According to Ethereum developers, gas fees won’t reduce because the update won’t immediately change how many transactions the network can take. It’s just a change of how the network transactions can be confirmed. The benefits may come later.
Will the Etherum network be down during the merge?
No. According to Ethereum developers, a lot of work has gone into planning the update, including making sure that there’s no network downtime. However, crypto exchanges may not allow you to send and receive Ethereum during the merge for more safety.
Will I be able to buy and sell Ethereum during the merge?
That depends on where you buy from. You can buy and sell Ethereum on Quidax during the merge.
Will I be able to move Ethereum in and Out of Quidax during the update?
No, you won’t be able to send or receive ETH on Quidax during the update.
Will the price of Ethereum change after the merge?
Crypto events tend to increase or decrease crypto prices. In July, when people were excited about the merge, the price of ETH increased. It won’t be surprising to see the price increase but there’s no guarantee.
