Ethereum Merge Event approaches. What is it all about?
According to network co-founder Vitalik Buterin, the much-anticipated software upgrade of the Ethereum blockchain, The Merge, is expected to take place around September 15.
The Merge represents a significant shift in how Ether tokens are minted and transactions are validated, away from proof-of-work mining blocks and toward proof-of-stake.
The POS method allows Ether holders to sign up to validate Ethereum transactions based on stashes of locked-up tokens. Pos will unlock a new eco-friendly and sustainable era for ether where power consumption rates will be reduced, setting the stage for further scalability that wasn’t possible under proof of work
Buterin added that the proof-of-work version of Ethereum now only has a rough “fixed number” of mining slots, following a final test stage of the Merge known as Goerli earlier this week. This means that developers can be more certain about when the official network upgrade will begin.
3 Misconceptions anticipated with the merge
Misconception 1: Investors will be able to withdraw staked ETH after The Merge
the developer community has confirmed that after the merger, staked ETH (stETH), a cryptocurrency that is 1:1 backed by ETH, will be locked and illiquid for at least 6–12 months
Misconception 2: Ethereum transactions will be faster after The Merge
It is safe to assume that Ethereum transactions will not be noticeably faster. However, there is some truth to this rumor, as Beacon Chain allows validators to publish a block every 12 seconds, approximately 13.3 seconds on the Mainnet.
Misconception 3: Ethereum gas fees will reduce after The Merge
One of the most common misconceptions among investors is that Ethereum’s upcoming upgrade will reduce the gas fees. While lower gas fees are at the top of every investor’s wish list, The Merge is a consensus mechanism change that will transition the Ethereum blockchain from proof-of-work to proof-of-stake (PoS).
This upgrade is expected to deflationary affect Eth. Since staking will most likely slow the rate at which ETH’s supply rises. And if supply growth slows the demand rises (Basic Supply & Demand Concept).
This will be a game changer for the Ethereum blockchain, opening up new horizons and capabilities for the network.
By the time of writing, the price of Ethereum had risen above $2,000, a 19.42% increase over the previous week.
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