September 15 Could Be The Biggest Day In Internet History
Merge has been a hot topic of discussion in the Ethereum ecosystem for many years now. The 3rd Amendment from the original Ethereum Whitepaper made references to PoS in 2014. According to Vitalik Buterin, both PoW and PoS can “act as the backbone of the cryptocurrency sector.”
Thus, it has been almost 9 years since the Whitepaper was published and the ambition to switch to PoS has not yet come true.
September 15, 2022, is a big day
However, Merge is now officially scheduled for September 2022. More precisely, an Ethereum developer calculated the project block height reached at 03:57 on 9/15 (UTC). This day can be noted as the most important day in the history of the Internet.
Merge is important not only because it is the culmination of many years of work by the Ethereum developer community, but also because it solidifies Ethereum as one of the most important building blocks for the future Internet. It upgrades security while reducing energy consumption, thus becoming a viable mechanism for companies with ESG requirements.
Ethereum PoS will eliminate the false narrative that PoW is bad for the environment while reducing issuance by up to 90%. Ethereum inflation currently stands at 4.3% and will drop to around 0.4% post-merge, while key fiat currencies are currently recording 40-year highs.
With Merge happening less than a month away, this upgrade is a major topic of conversation among major players in the space. According to investor Lark Davis, ETH is also outperforming Bitcoin, up 62% from local lows in July.
Merge is one of the most technically advanced code upgrades in the history of the Internet. Ethereum stores over 500k ERC20 tokens according to on-chain data, which means half a million projects rely on Ethereum to settle transactions in their ecosystem. There are also around 4,000 decentralized applications (dApps) on Ethereum and over 500k active addresses.
The entire network will be merged with the Beacon Chain, changing the consensus mechanism, while the network continues to generate blocks. There will be no downtime and all applications continue to function during the upgrade.
Many Web 2.0 applications require the server to be restarted or put in “maintenance mode” when performing critical updates. Ethereum is not such a luxury. Merge will happen while the network continues to work.
After the Merge is successful, the new PoS version of Ethereum will perform a “triple halving”. Bitcoin halving approximately every 4 years, halving Bitcoin issuance. This effect is often said to kick off the next crypto bull run.
When Ethereum moves to PoS, the network will issue 90% less ETH, which is equivalent to 3 halvings in a block. With PoW, Ethereum releases 13,000 ETH per day, but under the PoS consensus mechanism, it only mints 1,600 per day.
Unlike Bitcoin, which is often referred to as “digital gold” and “store of value”:
“Ethereum is a decentralized virtual computer known as the Ethereum Virtual Machine. It enables interactive, incentivized, programmable smart contracts and opens the door to applications that would not be possible in Web 2.0.”
Fred Wilson, the popular VC from Union Square Ventures, published a blog post on Monday focusing on Merge and its implications for crypto. Wilson highlighted the three main points of Merge: reducing carbon emissions, changing Ethereum’s supply/demand ratio, and increasing security.
Wilson also highlighted the potential for PoW fork after Merge. However, he did not make any predictions about the expected impact on the ecosystem.
“Holders of ETH at the time of The Merge will receive ETH POW tokens as a result of this fork. These ETH POW tokens could be worthless in time or worth a lot in time. There is really no way to know how ETH POW will develop.”
The future of the Internet
Web3 is now a popular term in technology, but it has not yet been accepted by the mainstream market. Ethereum may have been stifled by a major upgrade that cast doubt on its viability. When Beacon Chain is deployed on the mainnet, the future roadmap will be much simpler, allowing projects to launch on Ethereum without worrying that Merge may fail.
If Web3 is widely accepted and becomes a part of our daily lives, it is clear that Ethereum will be the main component. While Layer-2 solutions will facilitate most transactions, Ethereum will continue to be the processing layer for a large portion of Web3. September 15, 2022, could go down in history as the actual birth date of Web3. Or, if the Merge fails, that could mark the downfall. We will follow this historic moment together.
DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.
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