After three years of waiting, it’s finally happening: The Ethereum merge.
The Ethereum Foundation confirmed the dates of the long-awaited merge.
Wait a minute. Dates? Yes. It will happen in two phases.
So, armchair traders, HODLers, and institutional investors, you can mark Sept. 6 as the start of this much-anticipated development in the cryptocurrency market. What is the Ethereum Merge Date?
The first update, known as Bellatrix, will happen on Sept. 6. The second update, described as Paris, will occur between Sept. 10 and 20.
“Following years of hard work, Ethereum’s proof-of-stake upgrade is finally here! The successful upgrade of all public testnets is now complete, and The Merge has been scheduled for the Ethereum mainnet,” the organization said in a statement.
What else do you need to know?
We have compiled a guide on what you need to know about Ethereum, the update, and the merge.
The Ethereum merge is when the Ethereum blockchain will change from using Proof-of-Work (PoW) to Proof-of-Stake (PoS). It is called “the merge” because two independent blockchains will be merged moving forward. The transition will involve the merger of Ethereum’s mainnet with the Beacon chain.
Ethereum is the most used blockchain in the world. It powers Ether, the second-largest cryptocurrency to date. The Ethereum network has more than 120 million coins in circulation with a market capitalization value of approximately $306 billion. Ethereum also hosts numerous decentralized applications (dApps) and decentralized finance (DeFi) protocols.
In addition, it establishes the authenticity of non-fungible tokens (NFTs). It is believed that the launch of Ethereum 2.0 and the transition from PoW to Pos will provide more growth to Ethereum.
Under a PoW system, miners verify new transactions on the blockchain by solving mathematical puzzles. This consumes significant energy and has been a major source of criticism for the crypto industry. Some have equated the PoW mode of Ethereum to mining diamonds. But with the merge, things should change.
Under a PoS system, transactions are validated by the owners who stake or lock up their cryptocurrencies with the blockchain. This consumes less electricity and is a more environmentally friendly mechanism.
A few competitors of Ethereum already use PoS, including Avalanche, Binance, Cardano, and Polkadot.
The Ethereum merge is a much-anticipated moment in the crypto world and is expected to open new avenues for future Ethereum upgrades. Furthermore, the outcome of the merger will impact not only Ethereum but all products and services that rely on it.
Let’s be honest: Ethereum is huge. Therefore, the merge is likely to impact the entire crypto industry significantly.
Ethereum 2.0 launch is expected to bring significant benefits to users, including improved efficiency, scalability, and security. The shift will reduce centralization and also Ethereum’s energy consumption quite significantly. It is estimated that Ethereum’s energy consumption will be reduced by nearly 99.95%. A single Ethereum transaction currently requires power equivalent to an average household energy consumption of 6.5 days. The merge will address this component.
In addition, the rise of DeFi and NFTs has created bottlenecks within the Ethereum network and spikes in transaction fees. Hence, the merge will also help address challenges such as the inability to process many transactions, high transaction fees, clogged systems, and an expensive PoW mechanism.
Some users may expect that the Ethereum merge will reduce gas fees. That will not happen. The merge will alter the consensus procedure but will not affect any aspects that operate the network throughput or capacity.
The Ethereum merge will not impact users but will be an essential change for investors and miners. The upgrade will likely affect miners as the shift to PoS will see staking take over mining. There will be a pause in new token deposits and withdrawals, but the downtime is not expected to last long. It will just be implemented to ensure the transition is successful.
Users do not need to worry about the merge and will not be required to do anything. No changes will be made to their accounts or wallets. All balances will remain accessible to users, and no update or additional measures will be required.
Ethereum has been trading at around $1,800, but it is anticipated that ETH’s price will likely increase with the merger heading into 2023.
As any Ethereum observer will understand, the merge has taken a long time. Risks have been involved, much like any other notable change. However, that is one of the reasons why the Ethereum 2.0 launch has taken this long.
The developers have been doing significant testing and research so that the merge is smooth. That is why the launch, initially expected in 2019, was delayed. The Ethereum Foundation has led all work on the merge. Five teams have been involved in building Ethereum 2.0, and there have been multiple design improvements to ensure there are no setbacks or hiccups.
The merge is not the end of the Ethereum upgrades. It will be followed by the Surge, Verge, Purge, and Splurge. This entire journey is designed to make Ethereum more scalable, support more transactions per second, and make applications faster and more affordable. In addition, the upgrades are designed to increase security against different types of attacks and make Ethereum more environmentally friendly.
There has been some confusion about whether this upgrade will result in a new coin. The answer is no. Ethereum 2.0 will not be a new coin. Everything will pretty much remain the same for investors.
Everyone in the cryptocurrency industry is excited about this development. It could revolutionize the industry and pave the way for other protocols and digital currencies to employ the same upgrades, mergers, and transitions. Of course, for many traders focused on the price, market analysts are ebullient about the prospects of higher prices. Whether this comes to fruition or not remains to be seen, but one thing is clear: Ethereum is looking to overtake Bitcoin as the world's most popular cryptocurrency.
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