What the Ethereum merger means for the average cryptocurrency investor | by Stephen Dalton | Sep 2022

The merger took Ethereum from a Proof-of-Work (PoW) validation model or consensus mechanism to a Proof-of-Stake (PoS) validation method. But what does this mean for investors?

Photo by Traxer on Unsplash

So far, the only visible benefit for ETH investors is the lower price. ETH had fallen from $1590.60 to $1,266 or $324 per coin, since SEP 15 when the merge transition was complete. That’s almost 21% discount.

While I’m not a financial advisor, I think this is a buying opportunity.

What is a consensus mechanism?

“The consensus mechanism refers to the underlying concept underlying a particular blockchain technology. it is the basic rule that all nodes in a blockchain must obey before a new block can be added to a previous block in the blockchain network. — Crypto wallet.

Therefore, using a PoS consensus mechanism, those ETH holders who stake their coins are selected to verify blocks on the ledger and receive a percentage of the yield from their validation.

Cryptocurrency is a digital currency in which transactions are verified and records maintained by a decentralized system using cryptography rather than by a central authority.

This decentralized system allows for the direct transfer of encrypted messages or currency from one party to another, also known as peer-to-peer (P2P), without an intermediary like a bank or government agency.

Investing in cryptocurrency can be as simple as downloading an app and using a shared internet connection. However, it would be wise to research the coin or token you wish to buy. Few people will buy it without a logical purpose other than investment. Each digital currency uses unique technology to validate transactions and ensure security.

These transactions must be verified by looking at previous entries in the blockchain ledger. This verification process or validation excludes fake or duplicate transactions.

What is Ethereum (ETH)?

Ethereum is an open source platform for smart contracts and decentralized applications (DApps). Invented by Vitalik Buterin and others in 2013, it was the first successful cryptocurrency project built on top of a blockchain.

This article explains what the ETH merger means for the average cryptocurrency investor.

“The Ethereum merger is probably best described as a large-scale shift in this network consensus mechanism. Ethereum is moving from a proof-of-work structure to a proof-of-stake structure. This means the days of solving complex puzzles to verify blocks and secure the Ethereum blockchain will soon be over.” – The colorful fool.

What the Ethereum merger means for investors

#EthereumMerge #crypto #digitalX

So far, the hype surrounding this video has not been confirmed.

The Ethereum blockchain transition

The Fusion is just the first of several transitions trying to make it faster and cheaper.

The wave – will implement sharding, a scaling solution that makes bundled transactions on Ethereum cheaper.

The edge – will introduce “Verkle trees” that will ease the process of becoming a validator and make the network more decentralized.

The purge — will eliminate technical debt and historical data.

The Splurge — will apply various updates and upgrades after the other phases to ensure the network continues to function smoothly.

The next Ethereum software upgrade is called shanghai, and it’s scheduled to take place in about 6 months. This could open up a way to “unlock” some of the ETH staked, although only time will tell.

Vitalik Buterin says once those five phases are complete, which could take another two or three years, the network will be able to complete 100,000 transactions per second (TSP).

PoS is a consensus mechanism that allows token holders to elect validators for a “virtual node” on the ETH network instead of the miners who verify transactions and maintain the blockchain in a PoW environment.

“The consensus mechanism refers to the underlying concept underlying a particular blockchain technology. it is the basic rule that all nodes in a blockchain must obey before a new block can be added to a previous block in the blockchain network. — Crypto wallet.

This payment model involves users holding a certain number of coins to verify blockchain entry.

A ledger is maintained and updated within the blockchain using a blockchain hash algorithm. The ledger is updated through “virtual nodes” which can be anyone in the ETH ecosystem with enough tokens.

For investors, this means that anyone who owns ETH can use it to participate in the returns. However, many exchanges require 32 ETH to use. at today’s price of $1266.00it would cost at least $40,512 to become a validator.

So, does this new consensus mechanism leave the future of this cryptocurrency in the hands of just a few “rich” or elite ETH holders? Doesn’t it really make a decentralized concept more centralized?

In my humble opinion, the biggest concern is that validation authority will be ceded to the biggest players, who will have more authority than the smaller investors.

The merger to PoS will reduce Ethereum’s energy consumption

Compared to the previous PoW model, the energy consumption of ETH will be reduced by around 90% as a result of the merger.

the world spends around 3.8 trillion US dollars on electrical energy per year and consumes approx 3,600 TWh electricity per year. About 2.8% of the electricity generated worldwide is used for cryptocurrency mining.

Bitcoin consumes up to 0.2% of all electricity generated while ETH’s PoW model consumed 0.15%. It is not known if this figure includes the Ethereum Classic (ETC) mining operations, which will continue for the time being.

My question has always been how much electricity do all these banks use? I don’t know your city, but my city of about 9,000 has eight banks.

Final Thoughts

The Ethereum merger has transitioned it to a PoS system, which will help reduce mining costs while reducing energy consumption. This allows ETH to be used as an efficient payment method.

The transition from PoW to PoS will reduce the coin’s carbon footprint and make life better for all of us, not just investors.

However, cryptocurrency is not only used for investing, but also for digital payments and smart contracts, which can be used for many more applications, especially decentralized applications (DApps).

Many questions remain unanswered that will not be answered so quickly. But I expect everyone but the ETH bears to be hoping that the price will reverse soon.

Ethereum Merge Complete: Now WHAT? Will ETH recover?!

#Ethereum #ETH #crypto

“Cryptocurrency crime has soared to a record high in value terms over the past year, with illicit addresses receiving $14 billion in digital currencies, a 79% increase from $7.8 billion in 2020. — Reuters.

Keep in mind that many crypto and NFT thefts by hackers could be prevented with one like the Ledger Nano X.

“As an Amazon Associate, I earn from qualifying purchases.”

#FluxLabs #DeFi #Zelcore #Blockchain #POW #altcoin #crypto #Decentralization #Ether #Bitcoin #cryptocurrency #LUNC #TERRA @TheMergeUpgrade

DISCLAIMER: This article is for entertainment and informational purposes only. It should not be construed as financial or legal advice. Not all information will be correct. I am not a financial advisor and you should take everything I write as an informative and friendly hoax to show you what is possible when you invest your money in these vehicles. However, there are no guarantees. Consult a financial professional before making any important financial decisions.

Note: This post contains affiliate links. read my Disclosure Statement for more information.

About the Author Photo by Jean Springs from Pexels.

Stephen Dalton is a retired US Army First Sergeant with a degree in journalism from the University of Maryland and a certified editor of the Chicago Manual of Style in US English. Also a top author in the fields of nutrition, investing, travel, fiction, transportation, VR, NFL, design, creativity and short stories.

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