Since a long time, Merge has been one of the trending topics within the crypto exchange industry. It is an upgrade set which has taken place on Ethereum (the second-largest cryptocurrency network). With its launch, Ethereum has been performing the duties like housing several decentralized computing platforms. It is because of this, it supports the launch of various crypto projects on its network.
Even being one of the strongest blockchain networks in the world, its infrastructure still is not able to accommodate the rising global demand foisted on its network. Hence, in order to resolve such a situation, the Ethereum developers ideated a set of upgrades. One part of these proposed upgrades is the Merge and the other Beacon chain. This write-up will give brief information about the integral things one needs to know to about the Merge.
The Merge is all about the joining of the existing consensus layer of Ethereum with the new Beacon chain that utilizes the proof-of-stake mechanism. To explain in layman's terms, it is the amalgamation of the proof-of-stake mechanism with the current proof-of-work mechanism. The Merge has the goal to prepare the network for upcoming upgrades as well as improve the security of the network.
Following the Merge, the network ownership will change from the proof-of-work consensus mechanism to proof-of-stake. This will mean that new blocks will be added on by validators, and not by the miners. This phenomenon will enable the validators to make the network safe, thus removing the requirement for an energy-intensive mining procedure. In the crypto exchange industry, the Merge is creating the reality of fulfilling the network’s vision which is to be more protected, expandable and sustainable.
In the history of cryptocurrencies, the Merge is getting to be known as a new milestone because of its embedded potential and philosophical implications. This phenomenon will aid in increasing the network’s confidence and adding the much-required positivity and encouragement in the investors. This strategy can help the participants become validators, even if they are using the smallest of the smallest computers.
To decrease the scarcity and increase the network congestion on the Ethereum network, the launch of the Merge is crucial. Ethereum will turn into a deflationary asset and have a smaller overall supply by using the proof-of-stake mechanism. Furthermore, the PoS will minimize the amount of ETH issued to validators to make the network safe by offering huge security for the network at the lowest feasible cost.
By contributing towards building the network effectively, miners received a payment for their efforts in the form of a sizable amount of ETH prior to the Merge. ETH has become a deflationary asset by getting drastically reduced by over 90% with the use of PoS. This implies that per transaction, only a few ETH tokens will be given to the validators as a gift rather than simply paying an entire fee to the miner.
This will lessen the amount of ETH in the crypto exchange ecosystem, as the number of ETH being burnt is greater than the rate of TH being issued, leading to a decrease in the supply of ETH. Moreover, the Merge is quite a rare event in the crypto world, which might never occur again.
To wrap it up, predicting the price of Ethereum after the Merge is impossible as there are so many factors to consider. However, the Ethereum Foundation is consistently working for the past few years to actualize this upgrade. Besides addressing the environmental implication of the network and resolving scalability issues, this will attract also institutional investors via the introduction of staking to the network.
Rea Setia is an passionate writer. She loves to share business tips and her experience about industry.