The crypto community is awaiting the upcoming Ethereum Merge with divided opinions on how Ethereum is set to switch to a proof-of-stake (POS) consensus algorithm; experts and community members weigh in on how the ETH Merge will affect users, miners, and the future.
What is ETH Merge?
The Ethereum Merge, also called ETH2.0, is a broad term for Ethereum’s transition from a proof-of-work consensus algorithm to a proof-of-stake consensus algorithm. The Merge is designed to join the existing execution layer of the Ethereum network with its new proof of stake consensus layer, thus taking care of the energy-intensive mining process while securing the Ethereum network using staked tokens. Once the Merge is complete, the Ethereum mainnet will migrate from the proof-of-work consensus mechanism and adopt the Beacon Chain’s proof-of-stake mechanism.
The much anticipated Ethereum Merge is predicted to take place around mid-September 2022, and the crypto community awaits its launch with differing opinions. The news of the successful merge of the Beacon Chain consensus layer on the 11th of August 2022 increased the price of Ethereum by 10%, leaving users wondering if the bullish trend will continue when the Ethereum Merge happens.
Ethereum Merge Divides the Crypto Community
The Ethereum and crypto community have divided opinions about what the Merge means for the network. Ethereum is the most used blockchain network and the second largest cryptocurrency by market cap in the world. With such a big community, changes in the network are bound to attract differing opinions.
The Ethereum merge is set to affect not only the network but also a wide array of products and services that depend on the Ethereum network. This event will undoubtedly have a ripple effect on the crypto industry at large.
The transition creates an unfavourable situation for individual miners; a switch to a proof-of-stake mechanism means there’s no need for energy-intensive mining anymore. Larger pool firms may not feel it, but individual miners may have to ditch their mining equipment or switch to other PoW blockchains. Though this may mean bad news for miners, the energy-saving community sees this as good news. An end to PoW mining saves the planet and Ethereum’s reputation.
One cannot ignore how the merger will reduce the issuance of new Ether. According to an article by the head of research of IntoTheBlock, Lucas Outumuro, the cryptocurrency will no longer be awarded to miners, thus reducing the amount of new ETH produced. He estimates that the new Ether will drop by approximately 87%. This proposed decline gives ETH hodlers hope of the cryptocurrency exceeding the market cap of Bitcoin.