The Ethereum Merge has been completed. This is according to an update by the co-founder of Ethereum, Vitalik Buterin. According to Butern, the Merge has been completed. He added that all the participants of the project should be proud of the accomplishment.
The Merge is the project that moved Ethereum from a proof-of-work consensus protocol to a proof-of-stake. The new consensus protocol ensures that the network uses a smaller amount of energy in the production of ether, in securing the network and in future upgrades.
Objections Due To High Electricity Demand
Another implication of the Merge is that Ethereum developers can now be rest assured that the opposition to the network as a result of the high electricity demand required to sustain it has been addressed.
What has been obvious all along is that the demand for electricity by blockchain projects such as Bitcoin and Ethereum has been eliciting opposition. This is especially so in states that are in dire need of energy. With the migration to proof-of-stake, the Ethereum network can be sure that opposition to the blockchain will no longer be strictly due to the high energy demand.
99% Less Energy for Energy
According to available stats, the proof-of-stake Ethereum would demand +99% less energy than when it operated on a proof-of-work consensus protocol. With the new Beacon Chain, regulators would be focused on other issues that have to do with the internal currency of the network, ether. These issues will be centered around whether it is a security or a utility token, an issue that has been addressed by the SEC in the past.
“The merge will reduce worldwide electricity consumption by 0.2%” – @drakefjustin
— vitalik.eth (@VitalikButerin) September 15, 2022
Bitcoin, the premier cryptocurrency, uses the proof-of-work consensus protocol. This has been a matter of concern to energy agencies in several countries. However, the fact that the network is quite decentralized makes it impossible for one country’s clamp–down on the network to have a massive impact on the Bitcoin network. Moreso, the coin has been described as a commodity, which puts it under the purview of the Commodities Futures Trading Commission.
According to a CFTC Customer Advisory about the risks of digital currencies,
“virtual currencies, such as Bitcoin, have been determined to be commodities under the Commodity. Exchange Act (CEA)”
APY for Staking ETH
The recent move to a PoS consensus will give the stakers on the Ethereum network APY of between 4-6%. The network will also encourage more staking of ether to ensure that the network decentralization is sustained. The decentralization drive will also lead to more adoption of ether and other cryptocurrencies, especially those that are built on the Ethereum blockchain.
Another benefit is that Ethereum will no longer depend on miners to secure the network and mint the ETH tokens. Mining is an expensive venture. Miners generally need to buy expensive equipment to do so, but this is not the case with PoS networks in which the validators rely on staked pools.
Ethereum Price Action
At the time of reporting, ether is trading at $1,586. The coin is down by 1% on the day of the Merge. On the 7-day chart, the coin is down by 3%. In the past 24 hours, it has traded$23.6 billion in volume, while its market cap is $191 billion.