Open up your Google browser and search for an Ethereum merge, you will get a countdown that displays the exact number of hours, minutes and seconds left for the Ethereum merge. But how has a crypto-related project made it so big that Google added a countdown for it?
Well, the Ethereum merge made it big because it is expected to have a big and positive effect on the crypto world. Expected to be completed by Thursday, September 15, the Ethereum merge will reduce both the carbon footprints and ether supply.
But what exactly is the Ethereum Merge?
Putting it down into simple words, the Ethereum Merge is basically a plan that transitions the Ethereum blockchain from a proof of work to a proof of stake algorithm. This transition also has a secondary goal and that is to reduce the Ethereum blockchain energy consumption thus making it more productive and environmentally friendly for the future.
But why is a transition called a ‘Merge’? To carry out its transition from a POW to POS algorithm, Ethereum’s Mainnet, or its primary execution layer, will be merged with Beacon chain, a proof-of-stake consensus layer thus giving it the name ‘Merge’.
Why is the Switch from POW to POS Important?
Both proof of work and proof of stake are great algorithms and consensus mechanisms that protect and secure a blockchain from harmful intruders. The Proof of work (POW) mechanism, however, requires a miner to verify transactions by solving complex mathematical puzzles that often require a lot of computer power.
With the number of miners constantly increasing, the amount of energy being wasted on solving these mathematical puzzles are also increasing. Now with Ethereum switching to a Proof of Stake (POS) mechanism, energy losses caused by cryptocurrency will largely decrease.
While Bitcoin still hasn’t adopted the POS mechanism, other Ethereum competitors such as Binance Chain, Solana SOL USD, Cardano, Polkadot and Avalanche have been using it for a long time now.
A 99.95% Lower Energy Consumption!
Currently working on the POW mechanism, an Ethereum transaction requires a lot of energy, according to researchers it’s somewhere around the average per week consumption of a single US household!.
Now those are some dangerous numbers considering the fact that we are already living in a harmed environment. Currently consuming over 78.6 TWh a year, the Ethereum blockchain after switching towards a POS mechanism will be able to reduce energy consumption by 99.95%, now that a change!
What Change Will Merge Have on Ethereum’s Price?
Having undergone a project so serious and significant, you can only expect Ethereum prices to fluctuate, but will they rise or will they fall?
Experts believe that the rise and fall totally depend upon how perfectly Ethereum pulls this off since a smooth implementation will probably have a great outcome resulting in a price increase. Some analysts are optimistic about the Merge and have even predicted for the Ethereum prices to surpass the market cap of Bitcoin. Do you think the same? Drop your views in the comments below!