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ETH Merge Explained – Briefly
This enhancement to ETH eliminates regularity in mining, utilizing supercomputers to crack codes to carry out operations on the network and create a new currency. Instead, it uses a Proof-of-Stake method that allows ETH holders to stake their cash.
The effect on ETH’s rate of energy consumption is considerable. After The Event, ETH may require less energy, allowing Bitcoin to be the biggest blockchain that depends on Proof-of-Work. According to the ETH Foundation, ETH's energy consumption would drop by 99.89%. Whether NFTs are greener or not.
Several key upgrades which make ETH more scalable and valuable are also part of the Merge.
Is Ethereum really set for the Merge?
On August 18, Tim Beiko, the token’s core developer, stated on Twitter that the Readiness Assessments on the Merge Mainnet had been completed. On crossing everything listed, ETH is ready to join the Beacon Chain. Due to this, ETH will transit from a Proof-of-Work consensus to a Proof-of-Stake consensus if the Merge is successful.
The document "The Merge Mainnet Readiness Checklist" is a checklist for ETH developers titled creating the Merge into an acceptable for the Mainnet deployment. The sections in the compatibility checklist are Testnets, Tests, R&D, and Definition. Additionally, it requires updating the agreement and operations layer's software, validating the Engine API, and making publically accessible documents. It also requires test frameworks and elements on the agreement and operations layers by forking open testnets like Goerli, Sepolia, and Ropsten.
Modifications to Fee Market dynamics, execution-layer synchronization, load testing, and transitioning performance evaluation are all included in the component for development and research.
Merge Mainnet Compatibility Assessment completion confirms that the Merge is moving along as planned. The Merge will take place on September 15, as Vitalik Buterin and the ETH Project agreed upon. The hashrate, however, establishes the exact date.
The Merge’s possible effects on Ethereum
- Price
ETH has recently experienced a little decline in price after momentarily crossing the $2000 threshold owing to deflationary pressure and the FOMC meeting. The price of ETH has decreased by more than 2.3% during the last day and is now hovering around the $1750-1800 levels.
The EIP-1559 burning process will cause ETH to deflate. Following the Merge, there will be less ETH in circulation, which will cause the price to fall. Vitalik Buterin's prediction is that the ETH price will rise once again. Due to the "waiting period" concept, these events occur six to eight months after the Merge.
- Gas
Common incorrect information regarding the Merge includes claiming it will fix Ethereum's issues, such as its pricy gas and slow network. This is false. The Merge is a multi-phase process; this step just lays the foundation for later advancements.
Commonly incorrect information regarding the Merge also includes the claim that it will fix Ethereum's issues, such as its pricy gas and slow network. Last but not least, anyone who had been staking their ETH in anticipation of The Merge won't be capable of withdrawing it just yet. These services will be available after an Ethereum update called Shanghai, which is scheduled for a later date (six to twelve months from now, according to current plans).
What’s Next for ETH
Given the cryptocurrency market's unpredictability, even ETH's top executives struggle to predict the network's long-term destiny. The founder of ETH, Buterin, has described the 5 stages of the platform's development, starting with The Merge.
Because of L2s and the technical development known as sharding, The Surge, which comes after The Merge, should provide massive scalability or faster functioning.
From that point on, things start to become a bit esoteric. The Verge uses Verkle trees, a technique with several benefits, including the potential to minimize network storage and boost ETH's scalability. In contrast, the Purge reduces the amount of disk space needed for validators to function by eliminating technical debt and historical information. Finally, Splurge has to make additional advancements.
Even if The Merge is a hugely important step ahead, there is still a substantial technical effort (we're talking years) remaining to create ETH, a truly scalable and reasonably priced network for decentralized apps. Buterin has made predictions about Ethereum, albeit they haven't always come true.