The Merge: What will happen now? Finally! After months of waiting, the merger has just taken place. The Ethereum blockchain, therefore, mined its last block in Proof of Work as well as its first in Proof of Stake. Although it is still early to declare victory, the merger is not an end in itself.
In the months or years to come, the Ethereum network will continue to evolve. From 2023, it will focus in particular on dealing with the root of its main problems. Let's see together what awaits the second blockchain in the world!
The Merge is just one step.
If the life of a blockchain is punctuated by updates, The Merge is another step in the development of the Ethereum blockchain. A step that will allow the blockchain dear to Vitalik Buterin to bring new developments. And among the expected developments, Ethereum is not idle.
From 2023, a new upgrade should see the light of day: The Surge. This new update should allow the blockchain to greatly increase its scalability.
Up to be able to process 100,000 transactions per second. Broadly speaking, The Surge consists of applying the methods of sharding on the network. In the case of Ethereum, this will take the form of a fragmentation of the blockchain into several sub-blockchains. It is this fragmentation that will make it possible to process a much larger number of transactions.
According to Buterin himself, the merger tonight is only one step in the overall development of the network. On this subject, Buterin believes that the development is far from complete and that Ethereum would only be about 55% complete.
Because yes, if The Merge had been expected for many months, this upgrade on the Ethereum blockchain does not directly respond to the central problems of Ethereum: high transaction costs and network congestion. Indirectly, the merge will act as a tool to deploy new updates that directly address these issues.
The exodus of miners!
Until The Merge, the validation of transactions on the Ethereum network was provided by minors, according to a Proof of Work protocol. In a schematic way, these miners competed with each other for the validation of network blocks. As with the Bitcoin network, Ethereum was based on a simple protocol: increasing the difficulty of mining.
An increase which then required the acquisition of ever more efficient machines capable of processing an increasing number of calculations per second.
Now, with the move to Proof of Stake, transactions are validated by validators who stake their ETH tokens to prove their involvement in the governance of the Ethereum network. But the transition from Proof of Work to Proof of Stake leaves a considerable void for network miners.
Miners who have sometimes bought their equipment for a small fortune and find themselves unable to use it. At least on the Ethereum network.
If the migration to other networks had already started well, especially to the Ethereum Classic network, it seems to be continuing.
If the migration to other networks had already started well, especially to the Ethereum Classic network, it seems to be continuing.
In any case, the market seems to be betting on increased enthusiasm for these projects. Over the past 24 hours, the price of Ethereum Classic (ETC) has risen by 5.42%, largely outperforming the market which shows a smaller increase of 0.41%.
Can The Merge Boost Ethereum Adoption?
For many, the measurement of the adoption of an asset or an asset class is measured through a key parameter: the commitment of institutional investors.
At a time when the search for energy sobriety is carried as a standard by the public authorities and certain large companies, the drop of more than 99.9% in the carbon footprint of Ethereum is far from being anecdotal data.
For asset managers, compliance with sustainability criteria, materialized by the acronym ESG (Environment, Social, Governance) is now an absolute priority. Therefore, it is challenging to consider that Ethereum cannot score points thanks to the merger that took place last night.
Some observers believe that the price of Ethereum could quickly climb above $2,000.
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