Will Crypto Survive “The Merge”?
Crypto Winter has exposed the “get rich quick” schemes in our community and a shakeout was not only inevitable but necessary. Now is the right time to take on the larger issues that have hindered the widespread adoption of decentralized finance (DeFi) and its technologies: the cost of transactions and carbon emissions. The Ethereum Merge is an exciting and positive step in the right direction on both fronts.
According to Ethereum’s website, the Merge has four major components:
- The current Ethereum Mainnet will merge with the Beacon Chain proof-of-stake system.
- This will mark the end of proof-of-work for Ethereum, and the full transition to proof-of-stake.
- This sets the stage for future scaling upgrades including sharding.
- The Merge will reduce Ethereum’s energy consumption by approximately 99.95%.
In other words, rather than using huge amounts of electricity and expensive equipment to solve complex cryptography to process blockchain transactions, the Merge will reduce the amount of electricity consumed to near zero. This is not only better for the environment, but may be necessary considering the global energy crisis wrought by the war in Ukraine.
The Merge will also make trading crypto faster, cheaper, and more secure for the masses. We expect all of this to translate into a giant leap into the Ethereum blockchain — a major step on the way to mass adoption.
Indeed, the Merge may be just what we need to move from “Crypto Winter” to “Crypto Thaw.” The transition to proof-of-stake means that only participants who have a long-term interest in the ecosystem will be in charge; no more “get rich quick” schemes and shady platforms controlled by a single user.
I believe that the upcoming Merge may mark the beginning of the crypto market turning for the better, as more users will be able to adopt the Ethereum blockchain technologies into their daily lives. We are already seeing more consolidation happening right now. But, as with any upgrade, there are risks.
Ideally, the Merge will be seamless, the market will be impressed, and more funds will flow into Ethereum as investors look forward to future roadmap progression. Ethereum seems to understand just how much is at “stake” here; multiple “dress rehearsals” have been reported in the media.
But what if the Merge does not go off as planned? For example, a hacker could manage to exploit a major bug and huge funds might be lost during the process. In that case, investors would lose trust and pull their funds out of Ethereum. Alternatively, there could be some minor hiccups, but nothing that would negatively affect market sentiment.
Thankfully, the Merge has been contemplated for several years. It has taken multiple iterations to get to where we are today. Although my own platform is agnostic in terms of which crypto our users choose to trade, we are very excited about the Merge. What really matters is not the Merge’s effect on one token or one platform but on the ecosystem in general. This is why we believe that crypto will not just survive the Merge, but thrive because of it.
