The Ethereum upgrade often referred to as “The Merge” went live September 15th on the network of the digital currency. Changes in the consensus process from Proof-of-Work (PoW) to Proof-of-Stake (PoS) have profound effects on the Blockchain’s operational dynamics, allowing for novel use cases but also raising certain ethical concerns.
All the hype around the upgrade hasn’t prevented the digital currency’s value from falling in the previous few hours. At the time of publishing, one ether can be bought for around $1,507 USD, down 5.33% in the previous 24 hours.
We can see that the update occurred at about 1:00 am (New York time), with a price close to USD $1,600 per unit. Its price dropped throughout the day, from roughly $1,586 to around $1,473 in only 60 minutes of trade beginning at 9:15 a.m. After then, its value returned to about those figures and has since stabilized.
It’s safe to say that the Ethereum Merge will go down as a watershed moment in the development of cryptocurrency. One of Ethereum’s primary researchers and the man in charge of the migration, Justin Drake, expressed it this way: “The Merge greatly strengthens the security of Ethereum. To [take control], an attacker would have to steal the equivalent of 51% of all the money on the blockchain. To launch a successful assault using Proof of Work [the previous technique that powered Ethereum], you would need a budget of almost $5 billion to purchase the necessary number of computers and transformers, hook them all up to the grid, and launch your attack. We will have around $20 billion in economic security today with Proof of Stake [the method Ethereum is migrating to in the merge], and I anticipate this amount will rise rapidly.
A further intriguing feature of the Ethereum merger is that, using Proof of Stake, we can pinpoint the attacker and kick them off the network in the event of a 51% assault. Furthermore, we may punish them by taking away all of their investment in the game. Further, they will need to repurchase for a second assault.
The outcome of the Ethereum Merge will affect a wide range of Ethereum-based tools and services, including but not limited to decentralized applications (dApps), decentralized finance (DeFi) protocols, and millions of non-fungible tokens, all of which will benefit from increased security and more robust guard-rails against fraud (NFTs). Given Ethereum’s size and clout, this shift is also likely to affect how the crypto and larger Web3 business grows and helps forward climate-friendly initiatives.
Cover image: Ethereum merge – Universal Public Domain.
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