The Merge is a significant process, and not only for those who own crypto. It is expected to see the second-biggest blockchain reduction of carbon emissions, and if it’s successful, Ethereum’s electricity requirements will fall significantly.
It is not a secret that cryptocurrency critics argue about the amounts of electricity required from currencies like Bitcoin and Ethereum.
In the Merge, Ethereum will adopt a proof-of-stake protocol. It was also known as Ethereum 2.0 and has been delayed mainly because of its technical complexity and the large amount of money at risk.
After years of waiting, the moment appears to be close, as mid-September 2022 is the goal deadline.
How will Ethereum’s proof-of-stake work?
Every 12 seconds, the Beacon Chain will select a group of validators and create roles. One of the validators will be the block proposer, and another - attesters. With every new block, there will be a new block proposer.
Stakers will receive rewards for participating, but they can also lose everything if they try to do something malicious, and this is how the protocol protects itself.
Why is Ethereum moving from proof-of-work to proof-of-stake protocol?
There are numerous benefits that the move will bring to the crypto world. Let’s see:
Energy efficiency - over 99% reduction in power used for network security.
Less reliance on specialized hardware - The proof-of-work protocol relies on high output graphic cards, while after The Merge, a common laptop will be enough to participate in securing the network.
Reduced centralization risk - As there is no need for specialized hardware, anyone can become a staker, and the more people participate in security, the more robust a chain becomes.
New scalability possibilities -The proof of stake protocol gives new opportunities for scaling with the building blocks in place for sharding.
Cryptocurrencies to benefit from The Merge
As Ethereum continues to evolve, there are some cryptocurrencies within its ecosystem that are also likely to succeed. Here are some of them:
The Graph (GRT)
The Graph is known as one of the crypto projects to have a huge role in the future growth of Ethereum. According to Vitalik Buterin, it is a very valuable tool that can be used for storing Ethereum’s historical data.
This is huge as it puts The Graph at the forefront of digital currencies, directly tied to Ethereum and its future.
Polygon
Polygon is another well performing cryptocurrency, especially after Disney added it to its Accelerator program.
Important news is that the Polygon team is working on making it one of the best Ethereum layer-2s in the market. The founder of Polygon said that they are committed to Ethereum and will give back to its ecosystem.
Misconceptions and FAQ about The Merge
How will Ethereum 2.0 show up in crypto wallets?
Short answer - it won’t. Actually, there is no new ETH asset, and the existing ETH will work just as always.
Will The Merge affect ETH gas fees?
It is possible that the gas fees will decrease in the future. Of course, gas fees are related to block space demand, and The Merge has nothing to do with this.
Is ETH 2.0 a new coin?
As we already said, ETH 2.0 is not a new asset and the ETH users own, will continue to function.
Is there a risk?
Of course, there is a risk. There could be unforeseen bugs and technical difficulties along the way. Critics also worry about the security of proof-of-stake protocol, but Charbonneau reckons it could be safer because of a function called “slashing”.
Will Ethereum’s price go up?
We saw a significant drop in Ether’s price since the beginning of the year, and of course many investors are hoping to see it grow after The Merge. Unfortunately, no one can tell for sure what is going to happen.
Of course, there is a hope that the energy efficiency will make more big companies to invest in Ether.
When will The Merge happen?
It is expected to happen in September, but of course it is a planning timeline.