The core developers of Ethereum have decided not to convene as a group or make any major decisions concerning the future of the network over the next two to three weeks. However, this time away from pressing decisions is temporary.
The Ethereum core development team has one month to decide on the improvements they want to see in the next Shanghai update. The group is split on this issue. Again, the judgment will have far-reaching financial consequences.
According to Ethereum core engineer Micah Zoltu, who spoke with Decrypt, “plenty of people have lots of things they want to go in [Shanghai], but there isn’t yet unanimity on what will really make it.”
The integration will instantly reduce Ethereum’s energy consumption by almost 99%, and pave the way for enhancements that will increase its speed and scalability in the future. Assuming that everything works as promised, this should be great news for Ethereum (both the network and the asset). No one can say for sure if the price of ETH would skyrocket following the merging or whether it is already “baked in” and will not change.
Concerns relating to energy use
After the conclusion of Ethereum’s proof-of-work mining, the network’s hash rate will immediately drop to zero. Dan Held and other Bitcoiners recognize that this might increase public pressure on Bitcoin’s massive energy use. Additionally, Bitcoin will be singled out (without Ethereum as a co-offender) by authorities who are looking to crack down on blockchains that use excessive amounts of energy for their proof-of-work algorithms.
Applications to Future Work
Secondly, there are the possible ramifications for currencies other than the two leaders, notably the so-called “Ethereum killers” such as Solano, Cardano, Avalanche, and Polkadot.
As one would imagine, the price of these other proof-of-stake cryptocurrencies has risen substantially over the last week, perhaps in part because to the merging excitement that has surrounded Ethereum. While this may be true, several of Ethereum’s rivals have positioned themselves as greener options. With Ethereum switching to proof of stake, they will no longer have that advantage.
Other improvements
- Ethereum will use 99.95% less energy as PoS eliminates the need for energy-intensive mining.
- It dramatically reduces inflation (from 4.62% pre- to 0.49% post-merge) and reinforces the burn mechanism, implemented via EIP-1559.
- All economic activity – NFTs, stablecoin deposits, and DEX trading – is directly contributing to Ethereum’s deflationary status.
- It introduces scalability upgrades not possible under PoW, bringing Ethereum one step closer to achieving its long-term vision.
Where is Ethereum headed next?
It is essential to remember that the Ethereum Merge is not the last word. The Ethereum Foundation intends to carry out a succession of additional stages. Ethereum co-creator Vitalik Buterin has said that the foundation will be working on “the Surge,” “the Verge,” “the Purge,” and “the Splurge” to make the platform more efficient, secure, and decentralized. When this plan is complete, Ethereum will be a more scalable system, the authors write. At its completion, Ethereum will be capable of handling 100,000 transactions per second.
What does greater long-term viability mean for Ethereum?
If the cryptocurrency sector can successfully make the switch to PoS, it will send a strong signal to authorities that it can evolve in a manner that puts the planet’s health first.
Given the recent release of a report by the White House Office of Science and Technology Policy (OSTP) on the climate and energy implications of crypto-assets in the United States, the Ethereum Merge is expected to inspire more study and cooperation between the crypto sector and Congress.
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