What is Ethereum:
To Understand Effects of Ethereum Merge we need to understand about Ethereum. Ethereum is the number one alternative coin, the most popular cryptocurrency after bitcoin. Ethereum is called the most organized and powerful cryptocurrency in history. Besides a cryptocurrency, Ethereum is a platform for developing defi Apps.
The core programming language behind Ethereum is Solidity. There is a solid foundation of this platform with over 2000 plus defi apps built on Ethereum.
Currently, Ethereum merge is the talk of the town in the crypto space.
What is Ethereum merge?
Yes, the mighty merge is real now. Successfully replace Ethereum 1.0. The main concept behind the merge is “Ethereum consensus mechanism will change from Proof of work to proof of stake” Now a trillion dollars question what is a consensus mechanism is.
What is Proof of work? What is Proof of stack?
What is the consensus mechanism:
A consensus mechanism is a pre-defined set of rules used for necessary agreement. It is used in blockchain for any cryptocurrency. It is used for validating any data from nodes. In a traditional centralized database, one admin can edit, delete or modify any data. But in a decentralized blockchain-based system all users can request to edit, create, or delete blocks. Then if all nodes agree upon this edit or modification then those data will validate.
There are major types of consensus mechanisms used in cryptocurrency:
- Proof of Works (PoW)
- Proof of Stake (PoS)
What is Proof of work (PoW):
Proof of work is a commonly used consensus mechanism used by Bitcoin, Litecoin, and major cryptocurrencies. By PoW, participants need to do special work to qualify for the right to gain voting power. This special work is called mining. This PoW is much energy consuming and timely.
What is Proof of stake (PoS):
On the other hand, Proof of stake refers, Participants, holding a fixed number of blocks, and currencies and having the right to vote. This PoS is 99.95% less energy consuming, and less timely.
When the Ethereum merge happened:
It takes several years of preparation for the big date “Sept. 15, a few minutes before 3 a.m. Est time” when the merge happens.
Why Ethereum merge is important:
- The speed of creation of new blocks will be less.
- The Ethereum 2.0 will be energy efficient. It will be 99.95% energy efficient.
- Ethereum tries to give priority to holders not day traders.
What is the Effect of the Ethereum merge?
- Ethereum will be more centralized:
- What will the price of Ethereum after the merge:
- After the merge, Ethereum will be greener:
- After this merge Mining of other cryptocurrencies will be herder:
- The price of GPU will be lesser in the coming days:
- What is the effect of other Ethereum ecosystem dAPPs after the merge?
- What happens to Ethereum Classic:
- EtereumPoW (ETHW) comes to light after the merge:
Ethereum will be more centralized: The first effect of Ethereum Merge
Vitalik Buterin and his eight partners start Ethereum. Some of them are currently his competitors some left Ethereum. Now Vitalik is the most powerful centralized one to make decisions over Ethereum. Before the merge, too many extents, miners have some voice over the Ethereum foundation. But now, this platform is more centralized than at any other time in history.
What will the price of Ethereum after the merge:
After eight years of painstaking Ethereum, merge happen with lots of positive vibes in the crypto market. But currently, Ethereum’s price is $1330 which was $1700 at the beginning of September. This merge of Ethereum solves some areas of problems. But transaction fees named gas fee remain unchanged.
Though is a bit falling now, this is not the right time to say anything about the effect of the merge.
Effect of merge, Ethereum will be greener:
There are tons of mining rigs around the world mining Ethereum. As an industry leader bitcoin use 110+ Tera watt of electricity annually which is more than the total supply of energy in Malaysia. In 2009 for creating a block you need only a few seconds with a simple PC to create a bitcoin but now it takes a total of nine years of energy consumed by a household.
With this transformation of Ethereum, PoS will reduce this energy consumption significantly. Ethereum 2.0 will be 99.95% energy-saving.
Will the Mining of other cryptocurrencies will be herder? After the Merge
What do you think, Canaan inc, Hut 8 mining corp, and Hive will stop their mining activities after this merge. No way they will stop mining they will enter relatively easy and new cryptocurrency to mine. That’s why mining will be very much harder in the coming months. Making a profit with mining will be more difficult.
The price of GPU will be lesser after the Ethereum merge:
GPU is widely used for mining bitcoin ether and other cryptocurrencies. The major player in this market is Nvidia RTX 40, AMD RX 7000, and Intel Arc series. We already see the price of GPU is decreasing day after day. This effect is not done after 15th September or later, But from the start of 2022. Retail price is decreasing almost 7 to 15% over this year. Hoping this trend will continue in the next years too.
What is the effect of other Ethereum ecosystem dAPPs after the merge?
The ecosystem of Ethereum is one of the strongest ecosystems in the decentralized finance field. There are tons of dAPPS based on Ethereum. Aave, Compound, and Oasis work as lending and borrowing platform. Uniswap, Matcha, and1inch is working as token swap platform. Sabiler, Tornado cash works as Payments apps. Like as Ethereum has crowdfunding, portfolio, lending, and borrowing apps too. There is some significant effect on their market price and market portfolio too. On average they lose 6% to 8% of their market capitalization.
What happens to Ethereum Classic: The Merge
The price of Ethereum classic after the merge go up by $39.5 which is 11% higher than the previous day. Currently, it is treading near about $28 which is the lowest in recent months. There are ups and downs movement around the Eth classic. But in the long run, eth classic price is very much congenial to any other cryptocurrencies.
EtereumPoW (ETHW) comes to light after the merge:
Before the merge, the Proof of work loving section of Ethereum miner declares war against the merge. The total mining industry of Ethereum was $17 billion. When the PoS become a consensus mechanism the GPU used in Ethereum mining become obsolete. Because bitcoin mining is not based on graphical GPU but rather AISCs. They declare Ethereum PoW on the 8th of august, 2022.
On the first day, the price of Ethereum PoW was at an all-time high of $140.18. Then continuously this price is reduced, currently traded at $5.73.
This is not conclusion:
We already show the effect of the Ethereum merges becoming real in the crypto market. In a birds-eye view, the price of Ethereum is going down day by day. But we also analyze some long-run effects of the merge in as many areas as possible. The most fascinating thing in this merge to me is, this will opens many windows to develop tons of dAPPS for our future. In fine, our future will be more decentralized. Peace..
