The forthcoming merge from Ethereum proof-of-work to Ethereum 2.0 is the most highly anticipated event in digital assets’ history. The move from proof-of-work to proof-of-stake will enable Ethereum to attempt to solve the blockchain trilemma of scalability, security, and decentralization, and will reduce its carbon consumption by 99.85%. The merge is projected to take place in September 2021 and could be a catalyst for an eventual flippening for the No. 1 crypto. Ethereum’s staking yield will increase by 50% post-merge, and its inflation will drop from 4.3% to 0.22%, creating a supply shock. The market anticipates the next bull run to be astronomical for ETH.
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The Merge: Ethereum’s Evolution to 2.0
The cryptocurrency world is buzzing with excitement as the Ethereum network transitions from proof-of-work to proof-of-stake under ETH 2.0. This upgrade to the Ethereum network marks a significant milestone in the history of digital assets. Ethereum has been the leading altcoin with the potential to outperform Bitcoin, and this transition is vital to achieving that goal. According to Vitalik, “If Ethereum fails to scale, then Ethereum definitely failed.”
Why the Merge is so Important
The move to proof-of-stake is necessary to reduce energy consumption while increasing productivity. Currently, Ethereum’s proof-of-work system can handle only 30 transactions per second, but with the merge to ETH 2.0, this number will surge to an astonishing 100,000 transactions per second. The Ethereum network aims to solve the blockchain trilemma, which involves striking a balance between scalability, security, and decentralization.
The Process
The transition to ETH 2.0 is not a simple process and requires diligent testing and research to get it right. Ethereum needs to make sure the transition is seamless on their testnets before it goes live, so they can sort out any bugs. There are three testnets to complete the transition to proof-of-stake, and with the recent transition of Sepolia to proof-of-stake, ETH is on track to merge to ETH 2.0. Due to recent changes with the difficulty bomb, the merge is expected to occur in September of 2021.
Benefits of the Merge
The move to proof-of-stake under ETH 2.0 will significantly reduce energy consumption and improve productivity. The reduction in energy consumption will be around 99.85%, and the network will become more secure than proof-of-work due to the higher cost of attack. The merge will usher in a deflationary aspect with EIP-1559, which burns gas fees instead of giving them to miners, and with the increase in staking yields, Ethereum is set to become a complete package, better equipped than other altcoins that lack one or two aspects of the blockchain trilemma.
The Future of Ethereum: Flip or Flop?
The merge to ETH 2.0 is a significant engineering feat in blockchain history, and many experts believe that Ethereum will take over Bitcoin eventually. Considering the future of scalable blockchain technology with much-less energy consumption, Ethereum is set to compete with the market cap for derivatives, which is in the quadrillions of dollars. Though we are in a bear market currently, the next bull run is going to be astronomical for ETH holders.
