The next evolution in crypto is almost upon us. There’s a lot of noise in the crypto space on this topic, but one thing that is clear, the merge from Ethereum proof-of-work to Ethereum 2.0 is without a doubt the most highly anticipated event in digital assets’ history. The stakes have never been higher for Vitalik and the gang. We know if Ethereum is ever going to flip Bitcoin, considering how long the Merge has been delayed, this transition has to go perfect. Vitalik even said himself, “If Ethereum fails to scale, then Ethereum definitely failed.” It’s as simple as this. All the cards are on the table, and all the chips are in the middle.
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The next few months will be not just pivotal for Ethereum, but for the future of crypto finance altogether. Are we watching a changing of the guard in real time? Or will Bitcoin stand at the top of the mountain forever? May the best coin win. Let’s get it! In this video, we’re going to talk about the merge to ETH 2.0, when it’s supposed to happen, how it could propel the price of ETH into the stratosphere. Now, before I get into my prediction for Ethereum, I need to cover some recent news surrounding the Merge as a signal to me that the hype is real.
If you don’t know, if you’re new to crypto, the Merge is essentially the process in which Ethereum’s switching over from a proof-of-work consensus mechanism to proof-of-stake. If you don’t know what that means, be sure to watch this video on the Merge we did last month you can click above. Long story short, the switch to proof-of-stake is an optimal approach to use much less energy to get much more work done. This transition is not as simple as uploading to your Xbox, which required years and years of research and testing to get where they are today. Considering the end goal is reducing their carbon consumption by 99.85%, I’d say the effort was worth the time. Right now, with proof-of-work, ETH can currently only handle 30 transactions per second. Once the mainnet unites with the Beacon Chain, it will be able to handle 100,000 transactions per second.
The whole point of the Merge is so Ethereum can attempt to solve the blockchain trilemma. Think of it like a triangle where the three sides are scalability, security and decentralization. The reason there’s so many alts in existence is because most of them have one or two of these aspects down but lack the third. There are several projects out there trying to be the one that gets all three. But when the Merge happens, it will be hard to argue that ETH isn’t the complete package.
Before the mainnet can merge with the Beacon Chain, Ethereum must first make sure that it’s going to transition seamlessly on their testnets. This gives them ample opportunities to sort out all the bugs. When they do it for real, it’s going to work perfectly. There are three main testnets they must convert to proof-of-stake before the Merge can take place. Back in June, the merge on the Ropsten testnet took place with minimal hiccups. Just last week, the Sepolia testnet was also converted to proof-of-stake. Now that those two are finished, once the final trial run on the Goerli testnet is complete, ETH will be ready to commence the long-awaited merge to ETH 2.0. Due to recent changes with the difficulty bomb, basically, a code that slows block production and incentivizes miners to abandon proof-of-work, the Merge is now projected to take place in September of this year. In anticipation of this historic event, u.today reports that according to Glassnode, over 13 million Ethereum, more than 10% of the circulating supply, has been locked into the ETH 2.0 staking contract. Very bullish sentiment. I’m not alone in the line of thinking that the merge to ETH 2.0 could be a catalyst for an eventual flippening for the No. 1 crypto. Vikek Raman, a crypto researcher who used to be a Wall Street high yield bond trader, put out a very interesting series of tweets, illustrates why Ethereum will have the adequate structure to take over Bitcoin once the Merge is complete.
To summarize, although the gas prices won’t come down post-Merge, ETH’s inflation will drop from 4.3% to 0.22%. This will create a supply shock because of over 14,000 ETH being issued every day. That number will come down to 736 per day. It’s 95% reduction in issuance. Despite the ongoing argument on whether or not ETH will be more secure post-Merge, according to Vivek, ETH will have better security under proof-of-stake because it will cost more to attack them than it would under proof-of-work. Because of EIP-1559, the improvement proposal that burns gas fees instead of giving them to miners, there’ll come a deflationary aspect in play with Ethereum. And even if more ETH is issued than burned, EIP-1559 will also keep inflation very low. Once the Merge is complete, ETH’s staking yield will increase by 50%, which is why he makes the comparison that if Bitcoin is digital gold, then ETH is a digital bond.
We already knew that post-Merge, ETH will be more energy efficient than proof-of-work while using 99% less energy. In the same breath, ryanb.eth states that it costs $17 billion a year to run the Bitcoin blockchain. This detail alone is the deal-breaker for many investors. Vivek wraps up the thread by mentioning the importance of scaling and that there’s still more work to be done with sharding, light clients, staking withdrawals, etc. His final tweet reads, “It is worth repeating: the ETH Merge is one of the most impressive engineering feats in blockchain history.” When you really break down all the points he made, and you really look at all the data, unless you’re a diehard Bitcoin toxic maximalist, it’s hard to not think that Ethereum will take over eventually. Despite being in a bear market, Ethereum, for the most part, has maintained its monopoly over the NFT space. The anticipation to the Merge has been growing for years. If they pull it off this year, like they say they’re going to, the next bull run is going to be astronomical for ETH holders, especially that have been here since the beginning.
Think about this fact. Forbes recently pointed out, Ethereum’s price has soared 648% in the past three years, more than double the 250% gains in Bitcoin in the same period. The next 3-5 years, considering ETH is going to be much more scalable while using way less energy, there isn’t any way I see this trend reversing. If ETH outperformed Bitcoin without proof-of-stake, imagine what it’s going to do when it basically goes through a triple halving. Considering Bitcoin will eclipse gold’s $10 trillion market cap, eventually, it’s not hard to see Ethereum rivaling the market cap for derivatives, which is in the hundreds of trillions– no, actually, the quadrillions of dollars. But that’s a few cycles from now. Today, we’re still in the bear market. And that’s a perfect time to get a Ledger cold wallet. I put a link down in the description for you guys. This will help you accumulate more Ethereum and other coins safely and not on an exchange. Not your keys, not your crypto. We have to prepare for this next bull run while we still can. It’s only a matter of time. If you thought the last bull run exceeded expectations, I can’t wait to see your melted faces the next time ETH reaches all-time highs.
This article is a transcription of a video made by BitBoy Crypto
Original video: https://youtu.be/nzRJIjPACMc