If all’s gone according to plan, the Ethereum (CRYPTO: ETH) Merge should officially be complete this morning.
If you’re unfamiliar, the Ethereum Merge refers to the crypto’s transition from a proof of work (PoW) protocol to a proof of stake (PoS) protocol.
We won’t take a deep dive into the details of the transition here.
But in a nutshell, PoS will see an end to Ethereum miners and usher in a new era of validators. Validators will stake some Ether holdings to validate transactions and maintain the security of the blockchain. This requires far fewer electricity-hungry computers to maintain and should see energy consumption to run the network fall by a whopping 99%.
In a world gripped by an energy crisis and struggling to reduce carbon emissions that’s obviously good news.
But will the Ethereum Merge leave the blockchain more vulnerable to hackers?
Crypto investors concerned over security post Ethereum Merge
For some expert insight into that question, we defer to Ray Brown, head of marketing at CoinSpot.
As to whether the PoS model will make the crypto network less secure, Brown said, “While there are a couple of reasons for this line of thinking, it is likely that these concerns aren’t very significant.”
Rather than diminish security, Brown believes crypto investors could look forward to greater security. “The Ethereum Merge will, in all likelihood, actually lead to a more secure chain,” he said.
That’s because the Mainnet (PoW) version of the blockchain is shutting down. In recent months it’s been operating as the central chain but in tandem with the new Beacon (PoS) version as developers extensively tested the new protocol.
According to Brown:
With the conclusion of this phase of the Merge, all transactions will now operate on only one chain, as opposed to two. This will theoretically insulate ETH from more hacking attempts than its current protection, as there will now be fewer ‘access’ points and discrepancies between the two systems for hackers to exploit.
Will this impact the value of NFTs?
Investors who’ve bought non-fungible tokens (NFTs) have raised separate concerns about the Ethereum Merge. Namely that Ethereum miners might do a ‘hard fork’ into a different version of Ethereum that still runs on the PoW protocol.
“Ostensibly, this could lead to duplicate NFTs, which has some investors worried that the Merge may reduce the value of their digital collectibles,” Brown said.
But Brown doesn’t think NFT investors need be overly worried, adding:
This concern presumes that markets will recognise the legitimacy of a forked proof-of-work Ethereum blockchain. We’ve seen already that many digital currency exchanges and NFT platforms have announced they will only recognise Ethereum transactions made on the new proof-of-stake blockchain.
What else to expect post the Ethereum Merge
The Ethereum Merge has been underway for some two years already, with plenty of glitches experienced and ironed out in testing over that time.
But crypto investors should still be ready for some hiccups over the coming weeks.
“Ethereum is offering a very high bounty on bug hunting, which indicates that they do anticipate some growing pains post-Merge,” Brown said. “This, combined with a value proposition that is yet to come true means investors could anticipate some price volatility in the weeks following the Merge’s conclusion.”
