The Ethereum network has officially switched over to proof-of-stake (PoS) as a result of the Ethereum Merge.
The proof-of-stake switchover the Ethereum network undertook at 2:45 a.m. EST was a historic achievement the cryptocurrency world had been waiting for more than five years.
Both the creation of Ethereum and the validation of transactions on the Ethereum network have been fundamentally altered by the update.
Before The Merge, Ethereum was produced through "mining," an energy-intensive process in which users focused a lot of computer power on solving a number of challenges.
By using the proof-of-stake method, people and organizations pledge significant sums of their current Ethereum instead of generating new Ethereum.
Ethereum Merge Will Change How Businesses View Ethereum
EY Blockchain's Paul Brody told Benzinga that The Merge will not affect most enterprise use cases presently in use, but will materially change how businesses view Ethereum.
“The shift to proof-of-stake will also signal a new era in the competition among blockchain ecosystems. The merge will solidify Ethereum’s dominance and shift the basis of competition to the Layer 2 networks that exist to help scale up Ethereum," Brody said. "Layer 2 networks will be needed to handle a new wave of privacy applications and high-volume transactions in supply chain and finance.”
Experts pointed out the Ethereum community realized the entire business world will eventually move towards adhering to ESG business practices, hence it was critical for them to move to proof-of-stake to avoid any potential adoption resistance from large corporates, governments, and R&D organizations.
“Moving to PoS will help Ethereum increase its security, scalability and transaction speed per second. To summarise, The Merge will make Ethereum a go-to place for Web2 creators/developers and builders from all walks of life to partner with Ethereum to not only comply with socially responsible business practices but also to build and manage with great speed, scale, agility and security,” said Khaleelulla Baig, the co-founder and CEO of KoinBasket, a diversified cryptocurrency investment platform.
The Merge to Reduce Carbon Footprint By 99%
The Merge is expected to be positive for Ethereum users, developers, crypto asset investors and the broader ecosystem.
It will, by some estimates, reduce the carbon footprint of Ethereum by 99% and clear the deck for the Ethereum core developers to focus on other network upgrades including improvements to scaling, security and usability.
“It will remove a major overhang that has been a source of angst for investors, users and other community members since Ethereum’s founding. It will give certainty to the growing number of enterprises that use Ethereum and the Layer2 platforms that are helping Ethereum scale. Most recently, Starbucks, which announced a major push into Web3," said Alex Tapscott, managing director of Ninepoint Partners' digital asset group.
"The spark has been set for the Web3 revolution and the merge is the accelerant,” Tapscott added.
Merge To Clear Up Misconceptions About Cryptos, NFTS
The Merge was touted to be largely impactful for NFTs, where according to experts, there had been misinformation about the energy consumption of NFTs.
“But this migration will put even the most vocal critics' concern to rest. The misinformation that blockchains are like public transit — even if you don’t use it, the blockchain is still running. In this way saying that minting an NFT is consuming X amount of energy isn’t exactly correct, because that energy was going to be spent anyhow (so long as someone, somewhere was paying to use Ethereum),” said Jonathan Victor, head of NFTs at Filecoin.
Experts pointed out it is important not to evaluate The Merge as a singular event, but rather as a chapter in Ethereum’s larger, ongoing evolution.
Touted as a monumental moment for Web3 — the transition to proof-of-stake mitigates climate concerns, driving more Layer1s to follow suit while reducing this common barrier to entry for mainstream adoption of Web3.
“I know, in recent conversations with Vitalik and others at the Ethereum Foundation, that these Web3 milestones, such as light clients, single-slot finality, and usability, are being taken seriously in Ethereum’s evolution following the Merge — or ETH2. It is our continued responsibility as builders to make transacting on blockchains easier for real-world users of all experience levels,” said Marek Olszewski, Celo co-founder, Valora president and cLabs partner.
ETH Merge An Opportunity of a Lifetime
Experts said the Ethereum Merge could be the opportunity of a lifetime with the possibility of the inflation rate of Ethereum supply being decreased by 90%.
This massive decrease in the ongoing issuance of Ethereum supply was why this event has been dubbed the "triple-having."
“With the promise of a decrease in issuance and the continued burn of ETH supply, it has the potential to make ETH the ultrasound money of tomorrow's future,” said Walker Holmes, vice president of MetaTope.
“With great opportunity comes great risk and even more speculation. The consensus of the market is weighted in favor of the ETH merger being successful, however, large-scale issues with the transition to proof-of-stake could be catastrophic for the short-term outlook for ETH price,” Holmes added.
Are you ready for the next crypto bull run? Be prepared before it happens! Hear from industry thought leaders like Kevin O’Leary and Anthony Scaramucci at the 2022 Benzinga Crypto Conference on Dec. 7 in New York City.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Visit Benzinga's Crypto Homepage - 1,000,000+ depend on Benzinga Crypto every month