The Ethereum Merge is undoubtedly one of the biggest event of the crypto space. Not only are the Ethereum HODLers looking forward to the transitioned Ethereum Network to Proof of Stake, but Bitcoinists and the whole of the crypto ecosystem has its eyes on the network.
After years of delaying the Merge, due to various technical issues from the Ethereum Development team, the Ethereum Merge is finally upon us. The event could very well complete itself by tomorrow! However, besides making the Ethereum blockchain more efficient, this Merge is also important for other reasons.
#EthereumMerge could prove to be a key factor in $ETH‘s short term future. A cup and handle is likely to form at $2k which is one of the strongest bullish indicators.
Price Target “after” completion of the handle is at $3200. pic.twitter.com/L515XrSqCV
— Our Crypto Talk (@ourcryptotalk) September 12, 2022
Firstly, the energy efficiency. With the merge completing its course, the crypto space will be able to see the Ethereum network’s hash rate plunge to zero right away, since proof-of-work mining on Ethereum will end. Some crypto analysts are of the opinion that this huge change in the Ethereum Network might put even more public pressure on Bitcoin’s big energy use, something Bitcoiners like Dan Held have already acknowledged. This Merge may also leave Bitcoin alone (without Ethereum as a fellow offender) in the sights of regulators who are targeting energy-intensive proof-of-work blockchains.
Secondly, the impact this Ethereum merge will have on the crypto tokens commonly addressed as ‘The Ethereum Killers’ like Solana, Polkadot, Avalanche, Cardano, etc. These coins had set up their position as being more energy efficient than Ethereum in the past. Once the Ethereum network transitions itself to Proof of Stake from its Proof of Work consensus, all of these coins lose their USP to Ethereum. However, the news of the Merge have given a few of the tokens a little boost, but the future instances are yet to unfold.
Decrypt’s Sander Lutz pointed out that while Ethereum devs insist that there’s nothing major that could go wrong with the merge, “confusion surrounding the event could spike instances of scammers manipulating uninformed users.”
Finally, with the Ethereum Merge being a massive success, it will still be impacted by the negatives if the SEC attacks the ETH network and all other ETH-based tokens. According to Decrypt reports, ‘SEC Chair Gary Gensler continues to declare that Bitcoin is not a security and that he doesn’t mind the CFTC having oversight of it. What about Ethereum? He won’t share his view. It is widely believed that Gensler and the current SEC regime see ETH as a security, despite what former SEC official Bill Hinman said back in 2018.’
What is Ethereum Merge?
According to the technical definition by the Ethereum Foundation, the Merge represents the joining of the existing execution layer of Ethereum (the Mainnet we use today) with its new proof-of-stake consensus layer, the Beacon Chain. It eliminates the need for energy-intensive mining and instead secures the network using staked ETH.
This is being done with the objective of primarily becoming more energy sustainable but also at the same time will make it more secure and scalable.
Additional Read: Misconceptions around Ethereum Merge