The Ethereum Merger - What Is It And What Does It Look To Achieve?
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I saw something related to big investors driving the price of Ethereum down because they aren’t convinced about the merger. This was what drew my attention to read something about it and get to know what the Ethereum merger entails. Unfortunately I haven’t been able to find that piece of information that led me to reading on the Ethereum merger.
We know definitely that the Ethereum blockchain is responsible for a lot of crypto platforms and some wonderful dApps. As far as I’m concerned, the Ethereum blockchain rules the decentralized application world.🏃♂️👀
Ethereum developed by Vitalek Buterin is the second largest cryptocurrency behind the mother of all crypto, Bitcoin. Ethereum blockchain is responsible for dApps like Uniswap, Market DAO, etc. It’s largely responsible for the world of NFTs.
No platform is a 100% reliable or perfect and so has Ethereum proven even though it has had so much success. The Ethereum blockchain has some problems with its network use.
When you observe or notice a problem, it’s important you have it fixed and that’s what Ethereum have attempted to do or have done.
They realized the issues with their network and decided to make upgrades or changes to them which have been termed as the Ethereum merge.
Issues that have arrived with the Ethereum blockchain is the fact that it’s not environmentally friendly. There are several consensus mechanisms which have their pros and cons.
Proof of work the very first consensus mechanism has been found to not be environmentally friendly and not at all cost effective. It entails a lot of computational power which is harmful to our environment. The proof of work mechanism involve serval computers or nodes working and competing against each other to solve math problems and the first to solve is able to mine Eth coins.
The proof of work mechanism has become an issue for the Ethereum blockchain which has caused a change in the consensus algorithm model to proof of stake consensus mechanism. Proof of stake unlike proof of work is a mechanism where validators are chosen based on the number of assets they have locked or staked on the platform. They’re responsible for verifying transactions and receive rewards from verified transactions and creating new blocks.
This means that Ethereum will become energy efficient and environmentally friendly. The blockchain will no longer be run by proof of work but be run by validators who have the highest stake of assets on the blockchain.
Another reason is that Ethereum aims to improve its transaction and have even faster transactions by using the proof of stake consensus mechanism.
The merger will also see the combination of the Ethereum main net and the Ethereum beacon chain together. The Ethereum beacon is ideally used for staking on Ethereum but will now be integrated with the main net to improve Ethereum by developing the upgrades or Ethereum 2.0
These changes are not official yet and are set to be made official on the 6th of September, 2022.
Just us I’m about to finish this post, I get a notification from Binance about the merger. It reads, “Here’s Why Ethereum Whales Are Moving Their Holdings With Merge On The Horizon”.
It details how whales have been moving their assets to on-exchange addresses and the most recent being a transfer of $102,134,766 worth of ETH to an unknown platform.
It remains to be seen if this will cause a significant rise in the Eth coin. We’ll see what happens.
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I think the price of Ethereum might pump very soon. People can also buy the rumor and sell the news.