The successful switch of Ethereum’s network from a Proof-of-Work to a Proof-of-Stake consensus mechanism took place over the course of the last week.
The event was regarded by many as one of the most important technological advancements in cryptocurrency’s history.
According to the Ethereum Foundation, the Paris upgrade, the last phase of the Ethereum merge, was finished at 2:45 p.m. Hong Kong time.
The second-largest blockchain in the world, with a market cap of US$200 billion, will undergo a significant change in its architecture now that the merge is complete. The upgraded blockchain is now expected to consume less energy while potentially accelerating transaction times.
Ethereum’s co-founder Vitalik Buterin celebrated the successful transition on an Ethereum Foundation live stream on Youtube.
Buterin stated that the merge symbolizes what he considers to be the ideal version of Ethereum – “The Merge just symbolizes the difference between early stage Ethereum and the Ethereum we’ve always wanted it to become,” the developer said.
Post Merge Ethereum
It is still early to determine what will be Ethereum’s value after the implementation of proof-of-stake as a consensus mechanism.
Expectations are that Ethereum will be established as a deflationary cryptocurrency.
The process – known as deflationary – occurs when a currency generates a depreciating supply, ie. producing fewer new coins than before.
If the prediction materializes, Ethereum’s demand would increase while its supply decrease – meaning that the token would gain value over time.
For now – Ether’s price has been dropping after the much-awaited transition.
On the day of the merge, Ether was trading at around US$1,580 – over the past 24 hours of the upgrade, Eth devalued by around 9%, trading at around US$1440 on the day this article was written.
The following hours and days will be crucial for determining the viability of the upgraded Ethereum network.
Developers will assess the situation in the background by tracking indicators like the participation rate of validators.
The change does not make Ethereum instantly more scalable, quicker, or less expensive. But with the merger, it is now possible to enhance such functionalities.
Certainly, it will be exciting to observe how the market develops moving ahead now that the Merge has been completed.
The network of Ethereum Classic, for once, reaped the rewards as its hash rate rose nearly immediately following the update.