Place/Date: - August 15th, 2022 at 10:14 am UTC · 6 min read
Ethereum – the second-largest cryptocurrency in the world – has received investors’ attention for a while now, and the upcoming Merge is one of the most anticipated events in the crypto industry. ‘The Merge’ will involve an upgrade to Ethereum, as it will adopt a proof of stake model. The goal is to enhance its overall performance, saving energy, boosting transaction speed and improving scalability. This is a significant change, and it’s not known yet how it will impact Ethereum’s price.
The Merge is scheduled for September 19, and it’s expected to make a considerable difference in the world of cryptocurrency. Many people are waiting for the exciting moment, as market observers speculate the Merge will boost Ethereum’s price.
Crypto is still in its early days, which means there are great opportunities for it to evolve. There are innovations to come that no one can imagine right now but will undoubtedly matter a lot in this flourishing industry.
Ethereum has become increasingly popular since its launch in 2015. Unlike Bitcoin, which attempts to become a decentralized and digital form of currency, ETH looks to decentralize services and products using crypto, and its use cases go beyond money. What makes ETH different from other cryptocurrencies is its multiple applications. Besides being used for NFTs and fundraising, Ethereum’s blockchain is also preferred for the decentralized finance movement, which aims to imitate traditional finance services.
Ethereum’s use cases also involve company governance, intellectual property, contracts and agreements, voting, etc. You can use it to buy and sell crypto, exchange non fungible tokens, host smart contracts, and even play video games where you can earn real crypto just from playing. Regardless of the applications operating on Ethereum, it’s imperative to buy and spend ETH in order to operate. This helps create a growing demand for the asset as people utilize Ethereum for different types of projects. Before using Ethereum, investors should do their research and check the Ethereum price today. Getting educated is the first step toward investing in crypto successfully.
ETH is valuable due to its ability to power different innovative projects. While Bitcoin was designed mainly with finance in mind, Ethereum’s creators focused on building a flexible approach. Since it’s such a popular cryptocurrency, Ethereum also receives a lot of miner and investor attention. The fact that ETH has industrial uses adds value to it, making it the ‘silver’ of digital assets. Ethereum has multiple benefits, like decentralization, privacy, availability, less ambiguity, and security. Moreover, Ethereum is permissionless, so it’s not limited only to designated participants.
Ethereum 2.0 is an update to the Ethereum blockchain that utilizes a proof of stake model to check transactions through staking. This new version of Ethereum is a switch from the proof-of-work model that uses high-powered computers to finish complex mathematical functions. The mining process uses a significant amount of electricity to check transactions before they are registered on the public blockchain.
Proof-of-work systems consume significant amounts of electricity; however, the innovative version of Ethereum is expected to reduce the carbon footprint by up to 99.95%. This massive change in the crypto world can only add value to the industry.
Undoubtedly, the current Ethereum network is doing an excellent job at the moment. However, this doesn’t mean there isn’t room for improvement. In fact, some changes can make Ethereum even more appealing for users, changing the world of crypto for the better. Ethereum is not really environmentally friendly at the moment, and the transactions can be pretty costly. However, the Merge upgrade aims to make a difference and fill the gaps in the crypto industry.
The Merge aims at bringing together Ethereum and Ethereum 2.0 to create a unified and more efficient network. This means the current Ethereum chain that contains the whole Ethereum history will be integrated into the innovative Ethereum 2.0 system, switching from PoW to PoS. Proof-of-stake may not solve significant gas fees immediately, but it decreases energy usage significantly, leading to global scalability. Like PoW, PoS is a consensus mechanism. Put simply, it’s the way in which the network agrees on valid facts. With Ethereum, truth involves anything from simple transactions to complicated clauses of smart contracts. The mechanism works similarly to a game, requiring rules and rewards so the network participants can behave appropriately. The mechanism prevents cheating by requiring participants to stake something valuable. When it comes to PoW, this requirement involves expensive equipment and energy. By contrast, with PoS, the mechanism requires participants to stake shortly locked funds. Eliminating the energy requirement enables Ethereum to scale to global proportions.
The Ethereum 2.0 blockchain was developed in 2020; however, it hasn’t existed with maximum functionality, as the process was still ongoing throughout the years. However, the last upgrades on Ethereum 2.0 will happen once the Merge occurs. This involves enabling shards to execute smart contracts and process transactions. This allows developers to deploy applications on the blockchain of Ethereum 2.0.
The ultimate goal of Ethereum’s upgrade is to solve the trilemma within blockchain: decentralization, scalability and security. The network should handle thousands of transactions per second so that transactions become more cost-effective and quicker. If this goal is achieved, mainstream adoption is more likely to become a reality. The Merge is a significant step in the journey to increase network scalability. This update of Ethereum will likely result in increased security as well. This is because the network becomes more secure as more blocks are verified on Ethereum. As the adoption of Ethereum increases, the protocol boosts security against different forms of attack. While proof-of-stake is secure in its nature, the system is more complicated; however, if it is executed properly, it results in a more secure network.
Ethereum’s network consumes significant energy, but with the Merge, this won’t be an issue anymore. Proof-of-stake eliminates high-power computing from the process, and experts claim the network will become much more energy-efficient than today, leading to better sustainability.
The Merge is a long-awaited moment in the crypto world, and it will likely change the industry tremendously, making investors more confident.
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