Ethereum has been moving rapidly toward its long-awaited PoS merge which is now slated to happen around September 15, 2022. The Merge will see Ethereum transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus mechanism. The ambitious upgrade has undergone several years of thorough research and development, since December 2020.
What does this mean for Ethereum and its ecosystem?
Less Than a Month to The Event
On August 10, 2022, the Ethereum foundation completed the Goerli public test net merge. This was the final step before merging the mainnet with the Beacon chain. Bordel.wtf predicts that the total terminal difficulty (TTD) at the time of the merging will be 58750000000000000000000. What this means is that,
“the Ethereum PoW network now has a (roughly) fixed number of hashes left to mine.”Vitalik Buterin – Founder, Ethereum
The current hash rate of the Ethereum network is 1,023,040,711,843,551 H/s (1.023 PH/s). In order to achieve the set TTD of 58750000000000000000000, the Ethereum hash rate has to rise to about 1.773 PH/s. If this happens, the Merge will take place Thursday, September 15 12:00:00 2022 UTC.
The merging will improve the security of the network as well as the speed. While the merging will not lower fees on Ethereum out of the gate, fees will be affected when sharding is activated in phase 2. Ethereum sharding is expected to ship out in 2023. However, its release is dependent on when the Merge happens.
What the shards will do is improve the storage and accessibility of Ethereum. Moreover, the Merge will solve the issue of Ethereum’s lack of energy efficiency.
What Does The Merge Mean to Investors?
With only a few weeks to the event, ETH is trading at $1,837 (as of the time of writing). The asset has been rising over the past few days, in tandem with the Bitcoin mini-pump (which many are anticipating won’t last). Post Merge, Ethereum is anticipated to continue rising in price, mainly because the asset becomes deflationary. After the Merge, ETH issuance will settle around -4.2% per year. Bloomberg’s Mike McGlone predicts that ETH will hit a peak price of around $4500 by the end of the year.
Vincent Munene is a freelance writer and a great blockchain enthusiast. Blockchain has changed his life in terms of financial freedom and in return, he likes to educate people and keep them up to date on everything blockchain. He is a Biochemist by profession and also loves to play the piano.