The Ethereum (ETH 4.01%). The blockchain network is about to undergo a major refurbishment. This platform is slow, bloated, and is said to be inefficient. Its transaction fees tend to be annoying as they skyrocket when the network is congested. All of these issues should be resolved in the upcoming event, Merge, which will create the long-awaited Ethereum 2.0 system.
The test run has started successfully and the merge may occur in August. Is it possible for Ether tokens to skyrocket after a merge? Do I need to rush to pick up some tokens in advance?
Let’s take a look.
What is a merge?
Ethereum currently uses a Proof of Work (PoW) architecture similar to the blockchain systems it supports. Bitcoin (BTC 1.00%)... This is a very secure blockchain design, but it is also very inefficient in some respects. PoW networks consume large amounts of power in mining operations, and these systems take a lot of time to validate new data blocks.
This design has become an Ethereum albatross. It remains the largest platform for smart contracts, and app developers flock to this solution because of its proven stability and large scale.
However, many hungry challengers are just following Ethereum, offering similar smart contract capabilities with faster transactions, lower network charges, and smaller carbon dioxide emissions. The biggest so-called “Etherium killer” ever Cardano (ADA 3.87%)., Binance coin (BNB 2.36%).When Solana (Sol 4.17%)...
The Ethereum community eliminates many of these flaws by merging. This replaces the PoW platform with a faster, less resource-consuming Proof of Stake (PoS) system. In addition, Ethereum mining is no longer important, but investors can support new verification systems and bet Ethereum tokens to earn rewards like dividends. This switch has been on the card for years, and the developer community has unchecked all the checkboxes in the test checklist leading up to the final redesign.
The exact date of the final merge between Ethereum’s past transaction ledger and the improved PoS validation network will be announced shortly. The date hasn’t been set yet, but developers are targeting the second half of 2022. When switched, Ethereum is as fast, cheap, and power consuming as Cardano and Solana, and its large developer community doesn’t go. To that place. This is a game-changing event and a necessary step in the long-term evolution of Ethereum.
Do critical network upgrades always increase crypto prices?
Importantly, Ether investors have seen this change come a mile away. No one will be surprised because Marge simply fulfills the promise that was first made many years ago.
Therefore, the benefits of merging have already been explained in Ether’s current market price. The merge is just one of many components that leads to the final price tag, and market makers have been distracted by macroeconomic risk in 2022. The long-term promise of crypto-based decentralized financial systems and ultra-smooth payment networks is buried under fear of inflation and unclear cryptocurrency regulations. Ethereum prices have fallen by more than 70% so far, and smart contract platforms have had far fewer transactions per day this year.
Ethereum transactions per day. Data from YCharts.
For example, consider the April 2021 Berlin upgrade. This event optimized Ethereum’s smart contract network pricing and added several new transaction types. This enables a fairly important technology upgrade. However, the arrival of the Berlin update did not accurately trigger the fireworks, as EtherToken was traded almost exactly in line with Binance Coin and Cardano that week. Ether’s revenue was as consistent as the closest challenger on the introduction of staking contracts, the important Istanbul renewal in December 2019, and many other platform upgrades.
Therefore, you should not expect Ether’s price to skyrocket on the day of the merge. If anything, you may see bumps when the event is announced, but it should still have little effect on the market. Marge is good for the Ethereum ecosystem and investors will benefit from it in the long run. We will not immediately send the token price to the month.
If you are investing in Ethereum, we hope you are investing in a long-term mindset and a high threshold of short-term volatility risk. This is a bumpy vehicle, and Merge is not a magic wand that can handle all the challenges facing the Ethereum platform. But this is a good start and a strong boost, and today’s small Ether investment can help your portfolio over the long term.
