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Ethereum could finalize its transition to proof of stake, aka ‘the merge’, as soon as August this year if everything goes according to plan. At the recently held Permissionless conference, the cryptocurrency’s core developer Preston Van Loon told the audience there was plenty of momentum behind solidifying the move within the next three months.
“As far as we know, if everything goes to plan, August—it just makes sense,” said Van Loon. “If we have to move [the difficulty bomb], let’s do it as soon as we can.”
For those who may be unfamiliar with the merge, it refers to the imminent merger of Ethereum’s mainnet and the beacon chain proof of stake system, essentially ending Ethereum’s proof of work mechanism.
Since the launch of Ethereum, the network has utilized the PoW mechanism, and though it’s a simple and effective way to reach a consensus, it has one major drawback. With an increasing number of transactions on the blockchain, the computational power required also increases, which translates to higher energy consumption.
The merge is expected to overcome this drawback since Ethereum’s blockchain’s shift to the Beacon Chain will make mining obsolete. Due to this transition, it is projected that Ethereum’s energy consumption will be cut by at least 99%.
What the merge means for Ethereum investors
Despite the current bloodbath in the crypto markets, the merge will undoubtedly be a significant milestone, and many analysts believe it could propel Ethereum to new highs. At the moment, Ethereum is a significant part of many long-term investor portfolios; therefore, a successful upgrade is bound to make it more competitive with newer, faster, cheaper alternatives that have been taking its market share.
In addition to this, since staking would reduce the amount of Ethereum in circulation, this bodes well for its price. Finally, industry observers predict that once the merge is complete, more institutional investors will likely be attracted to the cryptocurrency, further brightening its prospects.
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