Crypto

Why the Ethereum Merger is Good for Bitcoin

The main story in the world of crypto is the Ethereum merger, which is expected to happen soon, with a target date of September 19th. Before that, there will be additional tests to make sure everything works, and all things considered, the changes will come this year.

However, a caveat should be added that the merger has been under development for a long time and has repeatedly returned. Tellingly, such delays (the last of which occurred earlier this year) do not cause disappointment in the crypto community, but rather humble expectation.

However, while it’s not surprising if the merger fails again, we believe that every time it’s delayed, it’s more likely to work next time, and so we could transition in September.

What is a merger?

In short, the merger is the next step in the evolution of Ethereum as it transitions from a proof-of-work blockchain to a proof-of-stake blockchain. The purpose of moving to Proof-of-Stake is that it allows Ethereum to begin the scaling process so that it can deliver faster speeds, larger volumes, and lower costs.

You will also see that Proof of Stake is more energy efficient than Proof of Work. While it is true that less energy is used in stake confirmation, one might wonder how important this is beyond the PR level. This certainly allows Ethereum proponents to at least point out some bureaucratically correct fields in a politico-cultural environment in which the use of energy is portrayed as disruptive.

Reduce your trading fees
Trading fees can be up to several hundred dollars per year. For this reason, good traders tend to reduce them because they can greatly affect their results. You can do it too using the links below:

What will the merger give?

If you are hoping that after the merger you will get rid of Ethereum’s eccentrically high transaction costs, think again, because this will not reduce the gas fee. In fact, from the point of view of the average Ethereum user (of course, no Ethereum user is average) who, for example, collects and trades NFTs or uses DeFi, the user experience for now will continue as before.

However, the merger sets the route for critical goals (lower fees, scalability, better user experience) to be achieved in the future. In fact, the merger is the first step that precedes a series of changes mentioned by the head of Ethereum Vitalik Buterin himself as Surge, Verge, Purge and Splurge.

It all sounds dirty and hilarious (which can sum up Ethereum and its entire ecosystem teeming with foreign artists, tech-obsessed and cold-blooded scammers) and should ultimately look like a bet on the implementation of a blockchain technology called sharding. This (along with Tier 2 solutions) will improve efficiency and reduce costs before we eventually see unrestricted hands-on and experimental developer and user activity.

The merger is part of a long-term plan that is likely to be positive not only for Ethereum itself, but also for the wider adoption of the cryptocurrency, because when the big crypto players make moves, the entire global ecosystem benefits.

In the short term, and from an investor’s point of view, it is likely that the Ethereum merger will play out as an information sale type event, although this remains to be seen and depends to some extent on how the cryptocurrency markets are in general. held at this time.

Why is the merger beneficial for Bitcoin?

There are ongoing discussions in cryptocurrencies about the concept of Bitcoin maximalism and whether this is a positive thing or not. These conversations have intensified recently as some crypto holders gravitate toward a maximalist ethic during bear markets. This may partly be due to major crashes that wipe out flimsy projects while bitcoin catches fire and its merits are highlighted.

The key tenet of Bitcoin maximalism is that other cryptocurrencies are not needed and cannot effectively compete with Bitcoin as a decentralized, borderless, peer-to-peer digital currency that can replace fiat currencies.

However, if we make a distinction between bitcoin, a decentralized digital currency, and Ethereum, a smart contract platform that can run decentralized or web3 applications, then there should be no conflict and everyone can thrive on their own terms.

As for other currently well-known first-level blockchains, Solana, Cosmos, Cardano, etc., they will fall into the last category (smart contracts and web3 platforms, not digital currency) and will clearly compete with Ethereum, but not Bitcoin .

The merger highlights this definitive difference, as Ethereum and other smart contract networks will use Proof-of-Stake (with the partial exception of Solana, which uses a hybrid system involving Proof-of-Stake and Proof-of-History), while Bitcoin remains as it should be, as a proof-of-work blockchain.

Bitcoin is not the only network with proof of work, but others that fall into this category, notably Litecoin and Monero, fall into the category designed as a medium of exchange.

It is likely that in the next few years, crypto will be more clearly divided into separate and unique sectors, linked by their blockchain underpinnings, but otherwise different and moving in different directions. Ethereum’s transition to Proof-of-Stake could be a shift that highlights the most stark difference of all: between Bitcoin and everything else.

The main story in the world of crypto is the Ethereum merger, which is expected to happen soon, with a target date of September 19th. Before that, there will be additional tests to make sure everything works, and all things considered, the changes will come this year.

However, a caveat should be added that the merger has been under development for a long time and has repeatedly returned. Tellingly, such delays (the last of which occurred earlier this year) do not cause disappointment in the crypto community, but rather humble expectation.

However, while it’s not surprising if the merger fails again, we believe that every time it’s delayed, it’s more likely to work next time, and so we could transition in September.

What is a merger?

In short, the merger is the next step in the evolution of Ethereum as it transitions from a proof-of-work blockchain to a proof-of-stake blockchain. The purpose of moving to Proof-of-Stake is that it allows Ethereum to begin the scaling process so that it can deliver faster speeds, larger volumes, and lower costs.

You will also see that Proof of Stake is more energy efficient than Proof of Work. While it is true that less energy is used in stake confirmation, one might wonder how important this is beyond the PR level. This certainly allows Ethereum proponents to at least point out some bureaucratically correct fields in a politico-cultural environment in which the use of energy is portrayed as disruptive.

What will the merger give?

If you are hoping that after the merger you will get rid of Ethereum’s eccentrically high transaction costs, think again, because this will not reduce the gas fee. In fact, from the point of view of the average Ethereum user (of course, no Ethereum user is average) who, for example, collects and trades NFTs or uses DeFi, the user experience for now will continue as before.

However, the merger sets the route for critical goals (lower fees, scalability, better user experience) to be achieved in the future. In fact, the merger is the first step that precedes a series of changes mentioned by the head of Ethereum Vitalik Buterin himself as Surge, Verge, Purge and Splurge.

It all sounds dirty and hilarious (which can sum up Ethereum and its entire ecosystem teeming with foreign artists, tech-obsessed and cold-blooded scammers) and should ultimately look like a bet on the implementation of a blockchain technology called sharding. This (along with Tier 2 solutions) will improve efficiency and reduce costs before we eventually see unrestricted hands-on and experimental developer and user activity.

The merger is part of a long-term plan that is likely to be positive not only for Ethereum itself, but also for the wider adoption of the cryptocurrency, because when the big crypto players make moves, the entire global ecosystem benefits.

In the short term, and from an investor’s point of view, it is likely that the Ethereum merger will play out as an information sale type event, although this remains to be seen and depends to some extent on how the cryptocurrency markets are in general. held at this time.

Why is the merger beneficial for Bitcoin?

There are ongoing discussions in cryptocurrencies about the concept of Bitcoin maximalism and whether this is a positive thing or not. These conversations have intensified recently as some crypto holders gravitate toward a maximalist ethic during bear markets. This may partly be due to major crashes that wipe out flimsy projects while bitcoin catches fire and its merits are highlighted.

The key tenet of Bitcoin maximalism is that other cryptocurrencies are not needed and cannot effectively compete with Bitcoin as a decentralized, borderless, peer-to-peer digital currency that can replace fiat currencies.

However, if we make a distinction between bitcoin, a decentralized digital currency, and Ethereum, a smart contract platform that can run decentralized or web3 applications, then there should be no conflict and everyone can thrive on their own terms.

As for other currently well-known first-level blockchains, Solana, Cosmos, Cardano, etc., they will fall into the last category (smart contracts and web3 platforms, not digital currency) and will clearly compete with Ethereum, but not Bitcoin .

The merger highlights this definitive difference, as Ethereum and other smart contract networks will use Proof-of-Stake (with the partial exception of Solana, which uses a hybrid system involving Proof-of-Stake and Proof-of-History), while Bitcoin remains as it should be, as a proof-of-work blockchain.

Bitcoin is not the only network with proof of work, but others that fall into this category, notably Litecoin and Monero, fall into the category designed as a medium of exchange.

It is likely that in the next few years, crypto will be more clearly divided into separate and unique sectors, linked by their blockchain underpinnings, but otherwise different and moving in different directions. Ethereum’s transition to Proof-of-Stake could be a shift that highlights the most stark difference of all: between Bitcoin and everything else.

Back to top button

Adblock Detected

Please consider supporting us by disabling your ad blocker.