The ETH merger is coming, what’s happening?
Ethereum revolutionized blockchain technology when it was launched in 2015. By introducing the world to the concept of smart contracts, the use cases for blockchain have grown exponentially. Thanks to Ethereum, we can now use cryptocurrencies and tokenized assets in almost every industry known to man.
However, over the years, some shortcomings of the protocol have been addressed. One of the major updates to the network is the upcoming merger, which will see Ethereum fully transition to a PoS consensus model, completely replacing the current PoW algorithm. This will make the ETH vs BTC debate even more interesting!
But what does this mean for Ethereum and its token, ETH? Is this evolution beneficial to the ecosystem as a whole? In this article, we try to answer these questions by taking an in-depth look at the Ethereum protocol. Let’s dig in.
What is an Ethereum merge?
Due to its pioneering status, Ethereum has been able to gain incredible popularity in the smart contract niche. Although there are many other networks offering similar services today, Ethereum is still the number one network for decentralized applications.
However, this popularity came with some caveats. The Ethereum PoW network does not scale well when used in large quantities, resulting in slow transaction execution speeds. Moreover, gas fees for interacting with smart contracts have skyrocketed. As a result, large-scale adoption of DeFi and NFTs has been effectively hindered on the network.
For this reason, the Ethereum developer community has been working on a full migration to a much more scalable PoS consensus. In this environment, miners are no longer needed, reducing the network’s energy requirements by over 99%.
Moreover, the network will significantly increase throughput to up to 10,000 transactions per second compared to the current 30. This allows the Ethereum network to compete with most modern current blockchains.
What is noteworthy is that users can stake ETH and receive passive rewards for doing so. This further democratized the network and increased decentralization.
How is the ETH price doing?
Since the beginning of the year, the cryptocurrency market has suffered, and Ethereum has followed suit. The price fell from $3,700 in January 2022 to a two-year low of $994 in June 2022. However, as merger announcements increase, investor pressure to buy is increasing.
Accordingly, the price has been steadily rising and recently reached the $2,000 level. Many analysts predict that prices will continue to rise even before the merger, and could even skyrocket once successful.
For example, Priceprediction.net predicts that the price will reach $7,300 by 2025, which would be almost double its current all-time high. Longer-term forecasts are more optimistic, with it expected to reach around $47,000 by 2030.
How will the merge proceed?
This merger is just one step toward making Ethereum a more scalable chain. The developer team plans to release a sharding update in 2023. This technology allows the current beacon chain to be managed as a sharded sidechain.
These chains provide app-specific computation, doubling the speed of the Ethereum blockchain and allowing it to reach 100,000 transactions per second. At the same time, these chains use the shared security of the beacon chain to be highly resistant to attacks, unlike layer 2 solutions that currently exist.
This will make Ethereum a true blockchain internet that can scale to massive levels. As a result, additional users will not affect chain capacity.
Should you invest in Ethereum today?
Ethereum has shouldered the burden of PoW consensus for a long time. This has hindered adoption of the network and sparked talk of detractors about its environmental impact. However, the switch to PoS will make Ethereum one of the most used and fastest blockchains at the same time.
This merger will significantly enhance our ability to provide dApp developers with an environmentally friendly, cost-effective, scalable platform. As a result, we can expect the value of ETH tokens to continue to increase and reach new peaks in the future. You can buy ETH today on Godex with complete anonymity.