According to Vitalik Buterin, the story around Ethereum’s “Merge” to Proof-of-Stake won’t really take off until the upgrade actually takes place.
In a Bankless interview, the Ethereum founder also said that the Merge needed to “happen on a timescale” and covered ecosystem scalability improvements.
Howeverin Talks About The Merge
According to Vitalik Buterin, the effects of Ethereum’s impending “Merge” to Proof-of-Stake won’t be felt until the upgrade is implemented.
At the Ethereum Community Conference last week, Buterin discussed the network’s long-awaited upgrade and how it would affect the cryptocurrency market in an interview with Bankless co-host David Hoffman.
He stated of individuals working on projects inside the Ethereum ecosystem, “Morale is going to go much higher once the Merge happens.
In addition, he stated that he believed the upgrade was “not priced in” because it hasn’t yet gone live, making it clear that he was referring to trust in Ethereum rather than the price of ETH itself. I fundamentally expect that the Merge won’t be priced in, by which I mean that it won’t even just be in terms of the market, but even just in terms of psychological and narrative considerations, the speaker said.
Many Ethereum supporters believed that the Merge might serve as a possible trigger for ETH’s price to rise, but the asset is now far from its highs due to the market-wide decline in cryptocurrency prices. Despite increasing this month, the value of ETH is still 66.8% behind its high at $1,620.
The Merge is expected to be the greatest protocol change in Ethereum’s history, despite the fact that market interest in ETH is now lower than it was in late 2021. It entails “merging” the execution layer and consensus layer of Ethereum’s Proof-of-Work mainnet with the Proof-of-Stake Beacon Chain.
Ethereum will switch from using Proof-of-Work and miners to using Proof-of-Stake and network validators once the Merge is live. Because the protocol won’t have to pay miners any more, it’s anticipated that this would result in a number of improvements, including increased energy efficiency and a decrease in the amount of ETH issued.
In his Bankless interview, Buterin made a reference to the issue of energy efficiency, adding that people frequently have misconceptions about how much energy Ethereum uses and how the protocol would alter following the Merge. He stated, “In terms of story, I don’t think it’s going to be priced in until after it happens. Many individuals still behave as though the environmental problem is a catastrophic fault today.
In 2021, Ethereum came under investigation for its environmental effect, largely as a result of China’s prohibition on crypto mining and the mainstream NFT growth.
Market cyclicality and scalability
Buterin also discussed the condition of the crypto ecosystem, which has been experiencing a dip for some months as a result of the aftermath of the bull cycle that was fueled by excitement last year, during the interview. He suggested that the cyclical nature of cryptocurrencies had advantages and disadvantages. He continued, before making a sly jab at dishonest individuals and politicians, “[Market booms] attract a lot of people and get people enthusiastic, which is excellent, but they give people much too much of a picture of what the space is delivering.”
They attract the attention of shady persons and governments that decide it is their business because it exists.
Buterin also offered his thoughts on other significant technological advancements occurring in the larger Ethereum ecosystem, much as he did during his talk at EthCC. He discussed Layer 2 scaling alternatives and acknowledged that technological advancement has lagged behind consumer demand. He stated, “The scalability stuff did not arrive fast enough for this cycle, but for the next cycle it will be,” before remarking that rollups and zkEVM solutions entering the market have been positive developments. The Merge and sharding were mentioned as two significant forthcoming protocol modifications. He also acknowledged the need for Ethereum to “radically modify everything.”
While he remained silent on the Merge’s anticipated debut date, he did say that it could not be put off indefinitely (the update has famously suffered years-long delays and setbacks). He acknowledged that “The Merge does truly need to happen on a timeline.”
The Merge will undergo one last test run on the Goerli testnet before going live on the mainnet. Tim Beiko, a member of the Ethereum Foundation, claims that will occur between August 6 and August 12. Mid-September is the anticipated date for the major event.