Post merge; What’s next for Ethereum

Ethereum developers will attempt to fix ethereum blockchain’s biggest issues through the deliverables of the Serenity upgrade. The serenity upgrade is dubbed the biggest development on the ethereum blockchain since its inception in 2015. Changing ethereum’s consensus mechanism from proof of work to proof of stake is expected to bring more efficiency and agility to transaction execution and the overall network. This is lined up as major part of the Ethereum 2.0 upgrade.

To do this a beacon chain running on proof of stake algorithm was created and runs separate from the mainnet in the last quarter of 2020. The beacon chain doesn’t execute transactions or run smart contracts; however, validators can stake their ethereum on the beacon chain to run nodes. It exists to prepare the ethereum blockchain for the introduction of sharding technology and and proof of stake.

The merge will bring the beacon chain and the mainnet chain together and mark the full transition of ethereum blockchain to proof of stake. This already happened on Ropsten, ethereum’s test network. Despite a number of reported issues, results from the test on Ropsten network will guide the actual Merge event on the main network. Developers speculate the merge could happen later this year or in the first quarter of 2023.

When the Merge is done, what is next for ethereum blockchain?

Sell the news?

The market isn’t looking healthy, but Ethereum is holding on well in my opinion. This relative stability could be the sole reason why the bear market isn’t so brutal to altcoins. Compared to the previous bear crashes, altcoins aren’t doing too badly. The proposed developments on ethereum blockchain is keeping holders from emptying their wallets. If the merge goes well, investors expect price to move up tangibly. But this is a simple ‘buy the rumour’. Completion of the merge process could trigger a brief moment of huge sell-offs that will drive ethereum price lower and bring the rest of the market down with it, bitcoin could be caught in cross fire too.

Switch off the mines!

Your mines are about to be deprecated! As the Proof of work mainnet switches off, so does the mines. Ethereum minning setups could cost a lot. Unfortunately, you might have to find a way to recoup some the money you spent on miners and devices…you probably did that already. With the price of ethereum, miners are surely making some nice returns on their rigs; but that’s about to change. You should consider running a validator node, should cost just about 32 Ether anyways…and a few extra expenses.

Sharding goes live!

When the Merge happens, ethereum will be just one step away from finally completing one of the most important deliverables of the Serenity upgrade – Sharding. The shard chain will be the third and final step in implementing the sharding technology as the merge completes the Proof of stake consensus implementation.

Ethereum developers plan to implement the sharding technology along with a switch to Proof of stake algorithm. Sharding will improve ethereum's scalability while the proof of stake consensus will do away with the bogus proof of work consensus to deliver an overall more efficient ethereum blockchain

The ultrasound money.

Fiat is not sound…sound money. The value of your savings is currently being printed away by the strong machines of the central banks on the order of your central government. Even some of your favourite altcoins fall under this category as well. Sound money system has a fixed supply. “Fiat system is inflationary and unsound money; bitcoin’s supply is fixed and is regarded as a sound financial system and ethereum is ultrasound money”.

^{@metwawa on twitter}

Thanks to EIP-1559, a fraction of the transaction fees paid on ethereum blockchain is burnt and reduces the amount of ether in circulation at a rate relative to the blockchain use frequency. A deflationary money is ultrasound money. Successful installation of all the deliverables of ethereum 2.0 is expected to increase frequency of transactions as more people flock to an improved ethereum blockchain. With more transactions come more burns and more tokens gone forever.

Not financial advice but when the merge is done, we will not be too far from these events. I’d personally prefer a price-friendly post merge events, but the market has its own way that is filled with uncertainties. But if the merge goes well tech-wise, then we can call it a win, regardless of the impact it has on the price and the general market.

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