Ethereum has reached a new milestone as the much-awaited “Ethereum Merge” upgrade went live on Thursday. In a bold move, the second-biggest crypto next to Bitcoin is set to change.
The merge is a significant stage in a progression of redesigns that ought to make the blockchain quicker, more versatile, and more energy effective
Ethereum is often compared to Bitcoin because of its similarities, including its aim to create a decentralized network for transactions. However, where Bitcoin is primarily used as a digital currency, Ethereum aims to be more than just money—it wants its users to have full control over their data and other assets. This is through smart contracts that can be used without third parties or intermediaries.
Why The Merge?
The Merge is speculated to be a boom for Ethereum’s price, which has been struggling to stabilize since it achieved a unit price of US$ 4,168 at the beginning of May 2021. So far, Ethereum’s price has dropped below $1,500 in the hours following the completion of the merge, but it is still too early to tell what the full impact will be.
The Merge & other cryptocurrencies
Ethereum has been working on moving away from proof of work since the launch of the Ethereum Foundation. Their latest move, known as the Merge, will bring about a proof of stake consensus model that is more energy-efficient than the former proof of work model.
This is also a positive step for the cryptocurrency industry as a whole, as it shows that coins can move away from proof of work and still be secure.
As we’ve seen with Bitcoin, moving to a new consensus model can cause some instability in the price of Ethereum until things settle down. The Ethereum Merge is a change of consensus mechanism, not an expansion of network capacity, and will not result in lower gas fees, as of the moment. However, it is hoped that future upgrades will gradually reduce these fees, even as these major events unfold.
What’s in for ETH holders
According to Doug Boneparth, a financial advisor and president of Bone Fide Wealth, holders of Ethereum need not do anything in light of the Merge. “It’s like a software upgrade, I think the best thing to do is just sit back and watch as things develop. The good news is that there’s still plenty of time to learn about crypto and blockchain technology — and even invest while taking time to strengthen your knowledge” he says.
