Will it be a threat or a climate utopia?
The Ethereum Merge, which will take place next week, has piqued the interest of the mainstream media, which describes it as a significant update that could either hasten cryptocurrency adoption or send terrible shockwaves throughout the market, causing it to crash.
The Merge, which involved switching from an inefficient proof-of-stake PoW consensus mechanism that relied on electricity to one that was more effective and didn’t significantly disturb the blockchain, has been in progress ever since the publication of the initial Ethereum white paper.
Forbes, an American business journal, compared the no-downtime upgrade to upgrading a spaceship’s engine in midflight. At the same time, Cory Klippsten (1), the CEO of Swan Bitcoin, made a similar observation in response to the Wall Street Journal.
“Trying to fix an airplane in mid-flight.”
While some media sources emphasize how risky the upgrade is and how one mistake may be fatal for the network’s future and the future of the decentralized apps (DApps) on the Ethereum blockchain, others are underlining how important it is. According to the British tabloid The Evening Standard, cryptocurrency traders had been holding their breath in anticipation of the impending merge, a failing upgrade might jeopardize the entire cryptocurrency ecosystem.
According to DefiLlama (2), the majority of the $150 billion stablecoin market cap and more than $33 billion in total value locked by Ethereum-based DApps are due to the Ethereum network. According to Anna Becker (3), CEO, and co-founder of EndoTech, if something goes wrong, it will be very difficult for the sector to exist.
If something goes wrong, the industry will suffer, making survival difficult. According to The Washington Post, the PoS method has not been tested as much as PoW because new vulnerabilities may be discovered despite PoW’s security having been examined over a longer period.
The new concept has only been tested on test blockchains, leaving open the possibility that the Ethereum Experiment could collapse or that larger Ether ETH stakes could manipulate the system. There is currently general agreement among sources that the Ethereum upgrade will make the blockchain significantly more environmentally friendly than before and reduce energy consumption by more than 99%.
Some contend that this might pressure the proof-of-work cryptocurrencies like Bitcoin and BTC (4) to follow suit. When the entire globe desperately attempts to reduce energy usage, Bitcoin uses more energy annually than even a country of Argentina’s size.
If this Ethereum flip is successful, it will probably put enormous pressure on Bitcoin and other cryptocurrencies to compete. Even Tesla declared that it would stop taking Bitcoin payments after at least 50% of the money had been mined using renewable energy, following a measure by the New York Legislature that would have investigated Bitcoin miners who used carbon-based electricity.
Cryptocurrencies will have to stop using so much energy as the need to reduce global emissions becomes more urgent. According to CoinMarketCap (5), Ether is presently the second-largest cryptocurrency by market cap, with a value of $187.5 billion, as opposed to Bitcoin’s $360 billion.