The merger is over – but what’s next for Ethereum? The course weakened, investors are disappointed. Experts, on the other hand, are enthusiastic about data.
A few hours ago, Ethereum received an improvement that has been waiting for years with the “Merged”. The Ethereum community is very enthusiastic about the successful change – but the course of ETH is disappointing and is now crashing. What’s next for Ethereum?
Ethereum after the Merger: Weak price, disappointed investors
After weeks of anxious and sleepless nights for some developers, the time has finally come: Ethereum (ETH), the second most valuable cryptocurrency by capitalization on the market, has completed the transition from Proof of Work (PoW) to Proof -of-Stake. (PoS) did. With this comes a fundamental change in the way the network processes transactions. In other words: “The Merger”, as the upgrade is called, heralds a new era for Ethereum.
Founder Vitalik Buterin looks relieved: “Happy Merge to everyone. This is a great moment for the Ethereum ecosystem. Everyone who helped make the merger happen should be very proud today,” the Russian-Canadian programmer said over His 4.3 million followers are on Twitter. And: “I can’t say enough about all the developers, researchers, coordinators and others who made this all possible.” Most users should notice or do something.
And we are done! Good luck everyone. This is a great time for the Ethereum ecosystem. Everyone who helped make the merger happen should feel very proud today.
— vitalik.eth (@VitalikButerin) September 15, 2022
In fact, “The Merge” ran completely smoothly: no bugs, no complications – however, the expected increase in the course did not materialize. The merger itself had the opposite effect on the price of ETH: immediately after the upgrade came into effect, Ethereum suffered a slight decline, while in the last 24 hours there were further losses of more than 8% (data from Coinmarketcap .com). No other cryptocurrency in the top 50 is currently corrected so intensely.
This is not really surprising: As with the Bitcoin halving events, these catalysts take effect with a delay, and the consequences for the price usually become apparent in the longer term. Investors are always disappointed. Greg, the popular crypto commentator, for example, wrote to his more than 342,000 Twitter followers with a wink: “Is the merger not working or why is Ethereum down? I thought we should be down to $10k now.”
Is the merger not working or why is Ethereum down? I thought we were supposed to be up to $10k by now.
— greg (@greg16676935420) September 15, 2022
Ethereum Merge: What the Critics Say
But Ethereum is not only criticized because of the disappointing price action. Many also warn of the pitfalls that a proof-of-play model entails. For example, Bitcoin enthusiast CarlBMenger, named after the Austrian economist, warns: “Money is power in Ethereum’s new Proof-of-Stake protocol. Congratulations, you have just recreated the Fiat system.”
The charge of centralization also weighs heavily: according to the data Two-thirds of Ethereum staking comes from just seven entities. Samson Mow, a self-confessed Bitcoin maximalist and one of the most well-known figures in the industry, also does not hold his opinion on the mountain, describing the cryptocurrency in its current form as a “database operated by a marketing company “. However, monetary theory notwithstanding, the Merge is a technical feat.
ETH fanboys watching the merger with anticipation is hilarious. There can be no technical failure in Ethereum because Ethereum’s existence is not based on any technology – it already failed in 2016 with the DAO fork. What exists today is a database run by a marketing company.
— Samson Mow (@Excellion) September 15, 2022
Why Merge is considered a technical masterpiece
With the Merge, Ethereum changed from a proof-of-work to a proof-of-play consensus mechanism on the fly. This means that from now on, miners with powerful hardware will no longer care about confirming their transactions in the network, just like Bitcoin (BTC). This is now done by individuals and institutions that have frozen at least 32 ETH (equivalent to almost 48,000 euros) in the system. This “freezing” is called staking.
As a reward, the so-called validators finally receive new ETH. In short: the consensus mechanism is an elementary part of every cryptocurrency – comparable to the heart, circulatory system or nervous system. It affects all areas of a blockchain. And change this mechanism during operation without any problems – this is a technical masterpiece.
Former “Lion’s Den” jury and “European Serial Founder” Frank Thelen is full of praise for the error-free switch and congratulates the Ethereum community on Twitter. However, he also sees advantages in Bitcoin and its proof-of-work approach.
Congratulations and respect to the #Ethereum community: the merger went well We now save 0.2% of the world’s energy and hopefully the same security. See also the advantages of #Bitcoin and POW approach and I am excited to see how both will develop.
— Frank Thelen (@frank_thelen) September 15, 2022
Ethereum after the Merger: What’s Next?
The merger was a delicate undertaking – without any room for error, because: Hundreds of thousands of investors and institutions capital park in this network. Tens of billions of dollars are tied to the Ethereum ecosystem, for example in the form of NFTs, coins or decentralized applications (Dapps). The developers spent about five years making the Merge as error-free as possible. Abilities are now free for other aspects. So what’s next for Ethereum?
Next is the update “Shanghai”. This is seriously needed because it brings critical features to the new Ethereum 2.0. Background: At this time, investors cannot withdraw their staked ETH. This means: Ethereum worth almost 21 billion dollars is frozen – and the trend is rising.
Therefore, the withdrawal function has the highest priority for the upcoming update. But it is unclear how Ethereum will proceed beyond that. Sometimes the priorities among the developers are distributed differently. Then it is also important to reach a consensus and reach an agreement. However, major delays are not expected – according to estimates, Shanghai could appear as early as next year.