What is an Ethereum “merger” and why is it important for the cryptocurrency market?

We are hours away from one of the biggest updates in the world cryptocurrencies recent years. ethereumthe second largest cryptocurrency on the market, is undergoing one of its biggest reforms in history with “merger”, a kind of 2.0 format in its technology.

“Merge”He wants to resolve the big doubts that ethereum in its behavior: from stopping being an inflationary currency to allowing its mining farms to stop polluting the planet.

What is a merger and how will it work on Ethereum?

So far transactions in ethereum they are done through a consensus mechanism called Proof of Work (PoW). In it, nodes (computers connected to the network) must perform algorithmic calculations to create blocks on the chain (blockchain) and be able to move or store money.

This behavior forces participants to use large computer farms in order to be more likely to find a solution and receive rewards: new ethereum which are then converted into real money for their owners. However, the cost of energy is terrible for the neighborhoods of these facilities.

For this reason, the developers of the program ethereum change the formula towards the so-called Proof of Stake (PoS) used in other cryptocurrencies like Cardano. In them, the so-called “miners” do not need large farms to receive new rewards, but only need to invest (in bidwhat is it called) cryptocurrencies to generate income, a kind of interest.

“‘merger is one of the steps that the network ethereum it will have to change its consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS). This measure will not affect users who already own the network’s native cryptocurrency, Ether (ETH), as this change will be applied at the blockchain level. If these changes are successful, ethereum can improve its performance in several aspects”, Carlos Eduardo Bernos pointed out, Buda.com Regional Manager Peru.

The transition to this system took years and they were tested in different branches of the network, for example, on the London Fork a few months ago. But now the system is being fully expanded, so it will be a real test for digital currency.

“I really look forward to the death merge from ethereum, one of the largest engineering structures in history. This opens the door to building a highly efficient ecosystem in many ways, from environmental impact to scalability and, above all, more security,” he said. RPP News Matthias Carikato, CTO at Buenbit.

How will this affect Ethereum?

Eliminating most energy waste and pollutants can have positive outcomes for users: ethereum you can now try to reduce the large fees you have on your chain, which increase based on the number of transactions at a time.

Noncash CEO Omar Azanyedo Sayan lists the possible benefits that can be gained in this regard:

• Technological advances have shown that less electricity is consumed in this way and therefore the carbon footprint is reduced.
• They are also better at preventing hacking, fraud, or duplication.
• Consensus Protocol ethereum going to accept portends faster transactions and more flexible processes
• It will be easier for the network to attract wide participation of validators compared to current efforts, which include integrating more and more miners; this should be reflected in network growth and usage

In turn, users with large farms will try not to lose money from their farms (which are based on dedicated servers and video cards for gamers) by switching to mining other farms. cryptocurrencies. The biggest “winners” in recent days have been Ethereum Classic, a model currency that will be kept as is, and Ravecoin. On the other hand, it is inevitable that many of them will decide to go out of business and start selling their equipment.

But what will happen to the price Ethereum? cryptocurrency experienced big drops this year due to the difficult conditions in which the market as a whole finds itself.

However, there is always a golden rule among investors: sell on rumors, buy on news. This dilemma is being solved in the last days.

expectations merger they made a price ethereum will rise to an average of $1,700 per unit. However, when the refresh began on September 13, the coin dropped to $1,500 per unit, remaining in that range.

Despite this, we are far from the historical peak of the coin: $4600 in September, but already from 2021.

In Peru, the crypto community gathered for a call Ethereum Day on Saturday September 3rd to celebrate the arrival of this update. In the rest of the world, investors are also celebrating meetings and conferences that are expected to be one of the industry’s biggest leaps. It remains to be seen if the promises are kept.

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