After many delays, the long-hyped Ethereum Merge is finally happening. As far as the world of crypto is concerned, the upcoming change is a big one. 

The Ethereum Merge is the joining of Ethereum’s Proof-of-Stake (PoS) Beacon Chain with the Ethereum Mainnet to transition the Ethereum blockchain off the legacy Proof-of-Work (PoW) system. This will result in a 99.95% reduction in Ethereum’s energy consumption, and the ability to further scale the Ethereum ecosystem. Since it is currently the most used blockchain in terms of transactions, this will save a huge amount of electricity each year.

It will result in Ethereum 2.0, a new version of Ethereum.

Since 2016, there have been two versions of Ethereum running in parallel. One has used the traditional method of recording transactions, while the other relied on the PoW system. This month, the two versions will be merged into one, adopting the new record-keeping paradigm. 

The merge will move the entire blockchain over to new Proof-of-Stake validator nodes which requires users to have over 32 Ether (ETH) to stake so that they can be able to participate. This is how they will be able to unlock block rewards otherwise the ETH will be locked up until a network update makes withdrawals possible.

Ether tokens will remain exactly the same for investors, and there should be no change to the operations of Ethereum-based applications. Furthermore, during the merge, users may not be able to transfer Ethereum-based assets.

Additionally, there will be a large decrease in the amount of Ethereum issued as block rewards. Currently, 13,000 Ether are mined per day. This amount will decrease to roughly 1,600 Ether each day after the merge. This is a 90% reduction in Ether issues, slowing the inflationary growth of Ether.

After years of delays, the Ethereum Merge is scheduled to go live on September 15, 2022.

However, there are several potential outcomes to the upcoming Ethereum Merge, as it is the biggest update to any cryptocurrency blockchain network to date including;

Denial-of-Service (DoS) Attack Vulnerability

With the move to PoS, network proposers will be known ahead of time, making them vulnerable to a DoS attack. For example, if a potential attacker is in line to propose one of the next blocks in the blockchain, they can attempt to establish a sophisticated networking attack on the current proposer’s node, causing them to lose their slot, and the transactions in that slot can be picked up by the attacker. There are solutions being worked on to make the proposer selection anonymous, but this is currently still a risk.

Scams

Many crypto applications have been referring to the merged and upgraded network as “ETH 2.” This has led to confusion about whether there will be a newly formed cryptocurrency called ETH 2 (there is not) and makes ETH holders susceptible to scams. Scammers may try to take advantage of this confusion and try to get users to swap out their current ETH for “ETH 2,” but in reality, they would be stealing the user’s Ether.

ETH Price Drop

If there are setbacks with the merge, this could cause a drop in Ether price, as well as many of the top cryptocurrencies that have built their platforms on top of the Ethereum blockchain.

According to some investors, the Merge will make Ethereum a more attractive investment than Bitcoin, but it doesn’t necessarily make Ethereum a threat to dethrone Bitcoin as the world’s top crypto.

It is also important to note that some crypto exchanges such as Binance had temporarily suspended Ethereum transactions ahead of the merge.