cryptocurrency

How much risk will the next Ethereum merge with?

  • The long-awaited Ethereum “merger” is set to take place around mid-September.
  • In the coming days, the price of Ethereum may experience sharp fluctuations in the short term.

The most widely used blockchain platform, Ethereum, is currently undergoing a major transformation. The long-awaited “merger” of Ethereum is set to move from PoW (Proof of Work) to PoS (Proof of Stake) around mid-September. The upcoming functionality will provide more security, speed, scalability and lower power consumption. However, incorporating Ethereum will have potential risks and drawbacks.

Merger-related risk factors

Consolidation is an important update to a very complex system. Depending on this merger, Ethereum may run slowly or even stop altogether. In the process, other unexpected errors may appear. Also, the overall security of Ethereum may change as a result of the merger. When converting to Proof of Stake, new technical challenges and unexpected problems may occur.

Depending on the consolidation, in the coming days, the price of Ethereum could face extreme fluctuations in the short term. In the long run, there is also the possibility that Ethereum will lose its dominance as the preferred cryptocurrency for smart contracts. The most likely outcome is that many programmable cryptocurrencies will take the lead instead of just one.

There is a possibility that the fork will become more popular than Ethereum itself. However, if you own ETH or an ERC-20 token on Ethereum, you are more likely to own it in any Ethereum fork as these branches are just replicas of the network. It is up to each user to choose which branch to support and what to do with their assets.

While Ethereum proponents and developers may argue that the move to PoS makes Ethereum more decentralized and resistant to hostile attack, actual data shows that centralized staking is on the rise, which could cause some significant issues.

In addition, the merger has already experienced many delays. Therefore, there is also a chance of further delay in consolidation.

Disclaimer:

TheNewsCrypto does not endorse any content on this page. The content described in this press release does not constitute investment advice. TheNewsCrypto recommends our readers make decisions based on their own research. TheNewsCrypto is not responsible for any damage or loss related to the content, products or services mentioned in this article.

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