Ethereum blockchain
Hello Bubble Riders! For those of you who don’t know what “The Ethereum Merge” is – here’s a small recap.
The Merge represents the joining of two parallel systems: Ethereum (PoW) and The Beacon Chain (PoS). This will effectively be the end of Proof-of-Work for Ethereum and allow for more scalability that was not previously possible. You can see more about their switch to Proof-of-Stake and their plan here.
This all sounds fantastic! And the recent market rallies we’ve been seeing for ETH and Alt-coins (up 49% since June 18, the lowest point in the last 12 months) is in part due to anticipation of this merger. But what if people are wrong? Here we look at a few misconceptions associated with The Merge.
- Ethereum gas fees will reduce after The Merge
While lower gas fees are the number one desire of all investors, The Ethereum Merge is a consensus mechanism modification that will switch the Ethereum blockchain from proof-of-work to proof-of-stake (PoS). In order to lower gas fees, Ethereum will need to work on increasing the network’s throughput and capacity.
- Ethereum transactions will be faster after The Merge
We can presume that Ethereum transactions won’t be significantly quicker. Although Ethereum experts predict that switching to PoS will enable a 10% increase in block generation, users won’t notice the tiny difference.
- Investors will be able to withdraw staked ETH after The Merge
The Beacon Chain is currently locked with Staked ETH (stETH), a coin that is backed 1:1 by ETH. The upgrade does not enable this change, according to the developer community. The Shanghai upgrade, the subsequent significant upgrade after The Merge, will enable withdrawal of stETH holdings. Because of this, the assets won’t be able to be used for at least 6 to 12 months after the merge.
If you found this helpful, Subscribe to The Art of the Bubble’s free newsletter.
Join us on Discord for live chat and daily updates.
