Get Ready For An Upcoming Bulls Market With The Ethereum Merger

Analysts predict that Ethereum is about to witness a massive bull’s market with the coming merger. Here’s everything you should know about Ethereum 2.0.

Even to my knowledge, no other event in the industry in the crypto world has been anticipated and speculated as the coming Ethereum merger. Now that we are already into September, we are eagerly looking forward to what the Ethereum 2.0 network is going to offer. And once it’s successful, the upgrade is claimed to lower the blockchain’s overall carbon footprint, reduce Ether supply, and potentially have a game-changer impact on the crypto ecosystem. The long-delayed upgrade is scheduled on 15 September where the network will undergo significant improvements.

Ethereum 2.0 — The Very Need Of The Hour

Ever since crypto started becoming mainstream, there has been two camps of conversation; ones that believe it as the future and the others who regard it as an outright scam. However, in recent years, a third camp has just surfaced who are critique about the environmental impact of cryptocurrency mining. Yes! The environmentalists! And to be honest, they are certainly not wrong! In an era when more and more people are vocally supporting climate change mitigation as the society’s highest priority, the carbon emission from mining cryptos are too conspicuous to ignore.

The Current Impact On The Environment

Say that you want to mine Ethereum. And given the abundance of resources, it’s relatively simple these days. You just grab a powerful computer — or a mining rig — and run your choice of software to reward yourself with hashes. Except the problem is that you aren’t the only person on Earth doing it. Especially from regions like China and the Middle East, mining cryptocurrencies have surged over the pandemic. And that requires power. Now given that 84% of the world electricity is generated from fossil fuels, the debate of environmentalism quickly becomes an argument.

So, How Can Ethereum 2.0 Improve This?

But before that you need to know the reason for the merge. To make mining and transactions much efficient and faster, the Ethereum Mainnet — or its primary execution layer — will be merged with the Beacon Chain — a proof-of-stake consensus layer. With this Ethereum will be making a successful transition from the proof-of-work model to the proof-of-stake model. Now what is a proof-of-stake or a proof-of-work model? Let us elaborate! Both PoW and PoS are consensus mechanisms that aim to secure blockchain and prevent any illegal activities in the entire network.

1. Proof-of-Work: Under the PoW protocol, miners verify every new transaction on the blockchain by solving complex computational problems. However, since this computational processing is highly reliant on CPU and GPU performance — or ASICs — it requires extensive power consumption, therefore, vulnerable to criticism.
2. Proof-of-Stake: Under the PoS protocol, transactions on the network are validated by token owners — those who stake and lock up their assets in the blockchain. Since this doesn’t require heavy computational power, the mechanism is known to be much efficient as compared to PoW and soon to be used on Ethereum 2.0.

The Importance Of The Ethereum Merge

You may feel that we made a typo in this article, but the Ethereum upgrade is estimated to reduce the blockchain’s energy consumption by a whopping 99.95% according to the Ethereum Foundation. Currently, Ethereum’s annual energy consumption stands at around 78.6 TWh. What’s more interesting about the merger is that once its finished, the issuance of Ether will be subjected to an equation that depends on the amount of Ether stake, instead of being set at exactly 5 million per year. For investors out there, it means that the merge will reduce issuance by over 90%.

What Does It Mean For The Crypto Space?

Reducing issuance directly translate to enabling Ethereum to become more scalable, setting the foundation for the blockchain to operate much faster, more efficiently, while paving the way for new Decentralized Apps or Dapps to be developed. The rest of the crypto industry is — of course — anticipating since Ethereum is going to be the first ever blockchain to switch from a PoW to a PoS mechanism, addressing many ongoing technological challenges with this network. Not to forget that Ethereum is already the largest blockchain in DeFi with over $35 billion locked on it.

Will It Affect Current Investors & Traders?

The switch from a PoW to a PoS mechanism will set back a huge number of miners as well as investors and traders. And they have already been busy positioning themselves ahead of the Ethereum merge. Some of them even went as beyond as proposing a Hard Fork on the network or to split the chain into a duplicate network that still supports PoW. All of which will be obsolete once the merge completes. The general notion is that interests have been surging ahead of the merge, with the number of addresses holding more than 10,000 Ether, according to blockchain data.

The Possible Bull’s Market & Beyond That

The merge will play a crucial role in future developments of the Ethereum blockchain since Ether is already down about 60% since the beginning of 2022. The merge will possibly revive its price — or as far as creating another bull’s market — however, there has been hotly debated topics within the crypto community. Nobody can predict where the price will reach or whether the merge will deviate Ethereum’s price at all. The reality is; if you are on the benefit of environment aspect, there’s a lot to welcome for sure; however, the same cannot be said for Ethereum traders.

Non-Financial Advice: The data, resources, and statistics in this article have been consolidated from multiple sources and neither the author nor the site is responsible for any financial profit/loss incurred from the data and opinions present in this article. Readers understand that all risks associated with cryptocurrency are taken on by themselves.