Tuesday, December 6, 2022
Published 2 Months Ago on Sunday, Oct 02 2022 By Mohamad Hashisho
The Ethereum merge has finally happened; Ethereum 2.0 is here. Ethereum founders initiated this update to tweak some of the shortcomings of Ethereum. It is not there to replace the original currency but to expand on it and make it more robust. The merge does upgrade the base Ethereum, but the coin still suffers currently, with a 17 percent loss just the last month alone. Will the merge open new doors on the Ethereum Rainbow Charts?
The merge is a gradual process to upgrade the base Ethereum. Formerly known as Ethereum 2.0, the merge is a series of tweaks implemented throughout the upcoming years. Ethereum was well known for using the same Proof-of-Work (PoW) as the famed Bitcoin. Pow systems are secure and non-central, but they are not without flaws.
PoW means mining, a cumbersome process requiring brute computing power and constant electric and cooling support. This process can also be slower than desired since you compete to validate a transaction. The merge will switch to a proof-of-stake system, also known as Staking, which does not require you to solve complex problems to get validation. With Staking, the amount is locked behind a smart contract, and then a validator analyzes the size and age of the stake, the validates the transaction.
The merge will improve many aspects of the base coin. Ethereum was constantly criticized for three main reasons: Scalability, security, and accessibility. The merge, or eth 2.0, will hope to solve all these worries and improve the Ethereum rainbow charts with these critical improvements.
When implementing PoW, users can only do a transaction on a single blockchain. This allows the blockchain ledger to have a detailed transaction history. Ethereum could only process 10 to 15 transactions per second. Sharding will split the blocks of a blockchain, enabling Ethereum to process a massive upgrade of one hundred thousand transactions per second. Sharding will address a widespread criticizing point of Ethereum and hopefully improve the Ethereum rainbow charts.
Additionally, the merge will not just allow more transactions. It will even make it cheaper to do so. As we mentioned, the PoW system can be demanding on hardware and eclectic sides. Many Ethereum holders would ask for compensation for their troubles mining the coin, hence asking for massive amounts to finalize significant transactions. With the switch to a proof of stake system, processing transactions will be more accessible, and miners will have to set their prices before finalizing the deal.
Furthermore, the merger will help Ethereum to shake off its heavy carbon footprint criticism. With the switch to PoS, no need for massive computing power and high electricity consumption and bills. Ethereum 2.0 will reduce power consumption by almost 95 percent and even decrease the cost of transactions. The greener approach might be an appealing point for new holders and positively impact the Ethereum rainbow charts.
Even with the merge, the crypto winter still hits hard. The prices of ETH still are at some of the lowest points currently. It is too early to judge whether the prices will go up or down. Some believe the merger will revitalize the coin and help it grow to all-time soaring prices. Yet some skeptics point out that the massive weight of such an upgrade might hold some bugs or technical issues. Ethereum secrets are yet to be uncovered, and whether the price will go high, or plummet will indeed depend on the success of the merge.
Additionally, the merge should not have considerable effects on the long-term holding of Ethereum. It is a slow process to go back to the heights of before. Investors or holders of Ethereum can use the current time to further educate on the current state of the crypto and eth markets. And the eternal advice when it comes to cryptocurrency, or any investment, is only to invest what you can afford to lose. No need to rush purchase, the merge can be a positive new addition to the crypto market, yet it cannot singlehandedly drag the market out of its winter.
Lastly, Ethereum will always remain in the spotlight of the crypto world. Many consider it the successor of Bitcoin after the last bitcoin is mined. The merge should not push you to any rash purchase to avoid the fear of missing out. You do not have to buy every dip or every trend. An upgrade to a coin should not be the only reason to buy it. Proper research and investment planning are the most crucial factors.
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