After this, based on the response received by the development team after the Merge, a slot height will be chosen for the Bellatrix upgrade on the Beacon Chain mainnet, and eventually, a difficulty value will be set for the mainnet transition from proof of work to proof of stake.
Although, in the past, one of Ethereum’s developers announced the date to be September 19, the most recent update from the team’s official blog made it clear that no such date has been announced and that The Merge is subject to all clearance after the process and test coverage are found to be sufficient.
Once everything goes smoothly, the developers will continue with the deployment process bringing Proof of Stake (PoS) to the network.
For the unversed, the arrival of PoS will shift the block generation process from mining to validation, making it far lesser harmful to the environment.
The impact of Proof of Work on the environment has been a long-time discussion not just in the crypto space but amongst the entire world.
Thus, a shift from PoW to PoS will make Ethereum a far more sustainable chain and also make it much more efficient for operating Decentralized Finance (DeFi) on the network.
With the shift, the process of validating transactions will move from the energy-intensive mining process to a randomized system of validators which will be staking 32 ETH in order to become a validator and will also be subjected to fines and penalties upon incorrect verifications, making PoS a foolproof consensus system.
But the arrival of PoS will not end the existence of the ETH tokens that are generated via PoW.
As the hard fork will take place post The Merge, both the new and the old chain will continue existing together, giving rise to two potential tokens, ETHW (generated from PoW) and ETHS (generated from PoS).
The same has been supported by Poloneix Exchange and Justin Sun. The former stated that post-fork, should such tokens be generated, the exchange will list both of them and become the first to do so. Justin Sun, the founder of the Tron blockchain, tweeted in support, saying,
“We currently have more than 1 million ETH. If Ethereum hard fork succeeds, we will donate some forked ETHW to ETHW community and developers to build ethereum ecosystem. (sic)”
However, Ethereum PoW will eventually be completely eradicated from the network as the development team is expected to drop the difficulty bomb sometime this year.
This bomb will elevate the difficulty of mining a block to inoperable levels post which every miner will have to shift to validating.
This will make Ethereum a Proof of Stake only chain, which in the long run will reduce the negative impact it would have had on the environment had it continued to remain a PoW chain.
The miners will surely be impacted as the rewards will go down, but with PoS, the security of the chain will also increase tenfolds, making it insusceptible to 51% attacks.
Ethereum on the Charts
While the world awaits the arrival of The Merge, investors await the impact this event would have on the price action of the asset.
This is because ETH’s recovery journey over the past couple of weeks has been pretty decent, but it is yet to make a solid recovery since it last saw an all-time high back in November 2021.
Right now, the cryptocurrency is dealing with the losses investors witnessed during the 50.75% crash from April to June. Having already recovered the June dip, ETH is currently trading at $1690 at the time of writing, inching closer to $2k.