Ethereum’s much-awaited ‘merge’ is set for around mid-September.
In the upcoming days, the ETH price may experience severe short-term volatility.
The most widely used blockchain platform, Ethereum, is currently going through a significant transformation. Ethereum’s much-awaited ‘merge’ is set for around mid-September, and will shift from PoW (proof-of-work) to PoS (proof-of-stake). The upcoming functionality will provide more security, speed and scalability, and low energy consumption. However, the Ethereum merge will have its possible risks and flaws.
Risk Factors Regarding the Merge
The Merge is a significant update to a very complicated system. Based on this merger, Ethereum may operate slowly or possibly stop altogether. In this process, other unanticipated mistakes also might arise. Also, Ethereum’s overall security may change, as a result of the Merge. When transferred to proof-of-stake, new technical challenges and unexpected problems might occur.
Based on the merging process, in the upcoming days, Ethereum’s price may experience severe short-term volatility. In the long run, there is also a possibility that Ethereum could lose its dominance as the cryptocurrency of choice for smart contracts. The most likely outcome is that several programmable cryptocurrencies will take the lead rather than just one.
There’s a potential that the fork will become more popular than Ethereum itself. However, if you own ETH or an ERC-20 token on Ethereum, you will most likely own them in any Ethereum fork because these forks are simply replicas of the network. It is up to each user to pick which fork to support and what to do with their assets.
While Ethereum supporters and developers would argue that the move to PoS makes Ethereum significantly more decentralized and resistant to hostile assault, the actual data shows that staking centralization is growing, which can cause some significant issues.
Additionally, the merger has already seen numerous delays. So, there is also a chance for further delay in the merge.