The crypto industry will soon be hit by an amazing event that promises to shake the crypto industry. It is no other than the Eth Merge that has been talked about for a long time. Still, somehow different issues and circumstances have delayed it.
In this article, you will see what the Eth Merge is, when the merge will happen, the possible impacts on the crypto market, and what you should expect.
What Is The Eth Merge?
The Eth Merge is the joining of the previous and existing layer of the ethereum Mainnet with the new Beacon Chain, which uses a proof-of-stake consensus mechanism different from the previous proof-of-work consensus layer. The new layer of ethereum hopes to eliminate the process of mining which is energy-intensive and introduces ethereum staking to secure the ethereum network. All this is done to realize Ethereum's vision of being more secure, scalable, and sustainable by changing the protocol rule.
One thing to know about the Beacon Chain is that it is separate from the Ethereum Mainnet. So even while Ethereum Mainnet still has its balances, accounts, and smart contracts and is still secured by the Proof-of-stake consensus mechanism, the Beacon Chain has existed parallel to it using the proof-of-stake consensus mechanism.
The Eth Merge is when the proof-of-work and the proof-of-stake systems will completely come together. The proof-of-stake replaces the proof-of-work mining consensus in securing the ethereum blockchain.
What Should Ethereum Community Expect?
Since Ethereum began in July 2015, it has been protected by the proof-of-work mechanism. With further development came the creation of the proof-of-stake system in December 2020, the Beacon Chain, which is separate from the Mainnet and exists parallel to it.
Beacon Chain has not processed transactions on the Ethereum Mainnet, even though consensus and agreement have been reached. But after the Eth Merge, consensus for all data, including transactions and adding new blocks, will be done by the Beacon Chain.
Ethereum will officially switch to the Beacon Chain in the Eth Merge, becoming the network engine for producing new blocks. Crypto mining will not be used anymore, and validators will be in charge of validating transactions and adding new blocks through the proof-of-stake.
The transaction history will be lost with the Eth Merge since the Eth merge will merge all Ethereum Mainnet transactional histories with Beacon Chain. So there is no need to panic. Your crypto and digital assets are still safe and secured.
Eth Merge And The Ethereum Community
In the history of ethereum, the Eth Merge is of utmost importance. It will impact the network capacity, crypto platforms, and crypto users. But what do you have to do to get ready for it?
Nothing! As it stands, there is nothing to do in preparation for the Eth Merge other than to wait for the Eth merge. Since your crypto and digital assets are safe and the transaction history is not cleared but merged with the previous network.
Also, you do not have to upgrade anything on your part, as the Eth Merge will cut across the ethereum community and network.
With the Eth Merge will come lots of fraudulent events asking you to upgrade your Eth to Eth2. There is nothing of that sort; avoid them.
When Is The Eth Merge?
If everything goes as planned, the Eth Merge is expected to occur on the 15th of September, 2022. Although there is no guarantee that the Eth Merge will occur, we can hope. However, if it is delayed once more, it would not come off as a surprise to anyone who knows how long the Eth merge has taken.
You must know that the Eth Merge is part of the three-stage ethereum proposed future upgrade process.
It started with the Beacon Chain testnet, launched in 2020, the launch of the shards, which should commence before the end of 2022, and only after the Eth Merge, which is the second stage, has been accomplished.
Benefits after Eth Merge
The Ethereum and ethereum community will benefit greatly from the PoS algorithm switch and the Eth Merge. Some of the benefits are:
✅ The Eth merge provides Ethereum investors another option to add to their revenue through staking.
✅ The inflationary pressure on the price will be minimized since there is a reduction in the issuance of Eth.
✅ There will be a remarkable reduction in power consumption and an increase in transaction time.
✅ Using Eth Merge as inspiration, more future updates created to scale the Ethereum network will be released.
✅ There will be an improvement in the network's decentralization due to the reduction of the entry barrier for validators compared to conventional mining.
Drawbacks of the Eth Merge
There's no doubt that there are many merits to the transition to the proof-of-stake algorithm and Eth Merge, especially in decentralized finance. However, there are a few cons.
Many people have expressed fears that the transition to the proof-of-stake algorithm and Eth Merge may increase rather than decrease the centralization of the network. This is a valid reason because the transition to the PoS algorithm will no longer be hard for big stakers to be involved in staking.
If this happens, the Ethereum network will draw regulators, which will not pose well for organizations or individuals possessing huge amounts of Ethereum.
Another demerit of the switch to the PoS algorithm is that miners will no longer be able to mine on the Ethereum network. However, Ethereum miners can start mining other coins like Ethereum Classic (ETC). Also, there's a chance that a branch of Ethereum making use of the proof-of-work algorithm will emerge after the Eth Merge.
Ether Price Prediction After Eth Merge
One thing consistent with merges of this nature is that the prices of the coin change. So, it's expected that there would be price changes after the Eth Merge, but the problem lies in accurately predicting the price change. This is because there are a lot of factors that determine how the price changes.
Some professionals believe that the Eth Merge is priced in by now. But one has to bear in mind that the issuance of new Ether will be drastically reduced due to the switch to a proof-of-stake algorithm.
Another factor that could make the Ether price climb several points will be the turning of many ethereum users or stakers to validators on the network because they have no option but to freeze their Ethereum.
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