Vitalik Buterin tweeted on the 15th of September 2022, “Happy merge all.” He congratulated everyone who contributed to Ethereum’s Merge, as it was a very impactful event for the creator of the Ethereum blockchain. Why is it such a significant update for crypto investors and the environment, you might ask?
The Merge transitioned Ethereum from PoW to PoS, and was a highly awaited event, considering the need and desire for such development in the blockchain. Here are some benefits that resulted from the update:
- It reduced CO2 emissions
- It removed the need for mining
- It enabled more people to jump on the crypto trend
- It eased the process of adding valuable blocks to the blockchain.
However, people are sceptical of its evolution, especially given its performance in the first half of 2022. If you want to trade crypto and don’t know how to feel about the Merge or if it will impact your investments and the crypto industry, keep reading these top facts to conclude.
What’s next after the Merge
According to Nasdaq, even if Bitcoin is the first cryptocurrency by market capitalization, the Ethereum blockchain is more frequently used. Crypto enthusiasts develop, trade and store NFTs there – the widely popular CryptoPunks is just an example. Ethereum is a computing platform that can support smart contracts and decentralised apps and is an open-source operating system. These are features that Bitcoin lacks, but there are some drawbacks to Ethereum, too.
Operating the blockchain used to consume a lot of power, and it’s just a reason why the Merge was so crucial. Now, this technology consumes ~99,9% less energy than before the significant update, and environmental-friendly people can breathe relief knowing the world’s a little bit greener. Through this upgrade, Ethereum’s annual CO2 emissions have been reduced from over 11 million tons to just under 870, which is less than the combined total of one hundred average American homes, based on EPA statements.
Moreover, the developers have been working to make the blockchain more scalable and secure, giving birth to the so-called ETH2. However, there are some steps to take before the crypto world gets there, so let’s find out how the new version of Ethereum can improve the blockchain.
The Surge
While the Merge’s primary goal was to decrease Ethereum’s energy usage by up to 99.5%, the Surge, another massive update, is expected to introduce a new feature called “sharding” in 2023. This upgrade divides a blockchain’s network into smaller partitions known as “shards”, which will significantly improve the network’s scalability.
The Ethereum Foundation claims that “sharding” will lower costs, increase network capacity, and improve transaction speeds. Hopefully, it will securely distribute data storage requirements, making nodes easier to operate and enabling rollups to be even cheaper. Know you can contribute to the Ethereum upgrades, and you don’t have to be technical – the community benefits from all kinds of skill sets.
The Verge
This phase seeks to introduce Verkle trees, a significant upgrade to Merkle proofs to enable smaller proof sizes or consensus mechanisms that create new blocks and confirm transactions.
This update will reduce node sizes and allow for more storage, consequently making a more scalable Ethereum.
For context, Merkle trees encrypt by transforming blocks of data into strands of code. The newest blocks are grouped as if they were in a tree and form branches, giving birth to a string of numbers containing the previous information – the Merkle root. Bitcoin blockchain first researched this method, and Ethereum adopted it later.
All in all, Verkle trees will make room for your data, which will be verified by someone and make the proofs more efficient. The Surge deals with rollups and sharding, while the Verge deals with scalability and proofs.
The Purge and the Splurge
According to Vitalik Buterin, “purging” is the “fun part”. Yet, considering that the Merge took much longer than expected, this event isn’t likely to occur in the foreseeable future. This is a shame because some think this step might draw more programmers to the blockchain. Nevertheless, you should know that the Purge phase seeks to reduce spare historical data, optimising the process of validating on the blockchain, reducing network congestion and allowing the blockchain to process many more transactions. According to Buterin, this phase should enable 100,000 transactions/second.
Updates’ impact on profits
Don’t stress if you hold an investment in Ether, as these events are yet to show any impact on investors’ money. What you should know, instead, is that these stages will only allow for more new opportunities to get hold of Ethereum and gain more digital assets. From the point of view of an investor, the Ether you held before the Merge should have the same value now as if the Merge never occurred.
Knowing that developers work hard to improve Ethereum shows that the coin isn’t dead and is yet to be improved. So, with increasingly more numbers of crypto ATMs worldwide, you might one day want to invest in crypto. If you’ve never done this before, you must know how to buy cryptocurrency. It’s not hard, considering you do a little research before jumping on a coin.
To begin with, it’s recommended to check the crypto’s price chart and see how the currency’s value has fluctuated throughout the day, month, and in the last 60 and 90 days. You’ll get a feel if you should invest. Yet, don’t forget that the crypto market is highly volatile, and no chart can promise you a fortune. The best part about these live and accurate charts is that you can see how other digital assets are doing, so you easily grasp ways to diversify your investment portfolio.
However, before you make up your mind on an asset, you need to register on a crypto exchange; otherwise, you can’t trade. It’s best to choose a popular one and seek security, not only low fees. Afterwards, decide how you’ll store your funds. Again, it’s a safe choice to go with a hardware wallet because even though it’s not convenient, it’s among the safest methods to store crypto. If you’re looking for a more user-friendly option, you can use the wallet that a well-trusted exchange offers after you make an account on the platform.
Hack-proof your funds and remember that the safety of your money comes first.
All in all, investing in cryptocurrency is an adventure. It’s an easy and widely-spread means for investors to diversify their portfolios, and they’d all likely tell you not to invest more than you afford to lose.
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