Experts attribute Ether's dramatic decrease in net inflation rate to the elimination of mining rewards and the "burning" of transaction fees.
According to Diciconomist, Ethereum's CO2 footprint was once as large as Finland's, but now it equates to the Faroe Islands. The upgrade doesn't stop there; four more improvements are expected soon.
Besides making the blockchain environmentally friendlier, this event impacted the world in some other aspects, too:
- It repurposed GPUs
- It gained attention from SEC.
- It increased the probability of centralisation.
- It enables more users to join the network.
Pundits think more significant Merge effects will be seen when the broader crypto market recovers. Keep reading if you’d like to get a grasp on what the future of cryptocurrency holds.
The Merge made the world greener.
The Merge refers to merging the original Ethereum Mainnet with a separate blockchain known as the Beacon Chain. So far, both Bitcoin and Ethereum have relied on a "proof-of-work" mechanism, which requires high-powered computer miners to solve complex puzzles to gain Ether and BTC. This event shifted Ethereum to the "proof-of-stake" mechanism, which eliminates the need for computers to compete against each other, reducing energy consumption by 99,95%. Users now store their Ether to participate in the race for more money.
According to Vitalik Buterin, the 28-year-old programmer who contributed to creating Ethereum, the Merge would reduce global electricity consumption by 0.2%. This is extremely important, especially today when everyone worries about the environment and resources like water and energy.
Ethereum has constant upgrades.
Instead of relying on a central authority, blockchains are typically designed with a core principle of decentralisation. Because of the resistance to single points of failure that decentralisation enables, they are trustless and more secure.
As blockchains become increasingly popular, platforms must ensure they meet the global demand for scalability or transaction processing speeds. Any malfunction may lead to the network's congestion, while numerous pending transactions can exceed its capacity.
However, such features aren't easy to achieve, considering blockchains are decentralised. The Blockchain's Scalability Trilemma that Vitalik Buterin issued can shed light on this topic.
This concept refers to the common belief that decentralised networks can only deliver two or three advantages in terms of network scalability, decentralisation and security. Although the Blockchain Trilemma poses significant barriers to blockchain technology adoption, emerging solutions could prove helpful in achieving those advantages.
The further improvements are explained.
Ethereum's Merge was a success, but improvements to the blockchain don't stop here. Future updates in the crypto world help pave the way for what many economists believe to be the future of payments: digital transactions. This comes because digital payments have become more secure regarding cryptocurrency and don’t imply changes in virtual coins’ prices and values. While there's no visible impact on the Ethereum price linked to the Merge, this event brings about popularity and news, which generally influences digital coins' value.
Here are the four open concepts regarding Ethereum upgrades explained:
The Surge. This update will introduce the "sharding" feature next year, which divides a blockchain's entire network into smaller partitions known as "shards". This poses various benefits, like increasing network capacity, making nodes easier to operate, securely distributing data storage requirements, improving transaction speeds, etc.
The Verge. This update should significantly decrease Ethereum's reliance on nodes as a store of information and history. The blockchain becomes more scalable by reducing node size and optimising Ethereum storage.
The Purge. This update is expected to drastically diminish the amount of space needed to store Ethereum on a hard drive, freeing up space and taking a burden off developers' shoulders.
The Splurge. This is the final longed-for improvement, and it will ensure the network runs smoothly after the upgrades.
GPUs can help medicine, gaming, marketing industries and more.
People realised their GPUs could handle algorithms because these computer components were created to process equations for 3D and physics rendering, which resemble the equations in blockchain algorithms. GPUs thus signalled a significant shift for the community, as it was more efficient than other types of mining equipment. These systems got miners hooked up on working on blockchains and making huge loads of money.
Following the Merge, Ethereum miners have woken up with their hobby taken away. Mining for Ether is not a profitable job anymore; yet, crypto-makers can use their dusty GPUs for other things. Here's a list of inspirational, possible activities that could put computational power to good use:
- Video editing
- Artificial heart creation
- 3D graphics rendering
- Machine learning
- High-octane password cracking
- Help in the cancer research process.
What the future holds for Ether
Ethereum, one of the most noticeable second-generation blockchain projects, debuted with an initial supply of 72 million Ether. These tokens incentivise miners to secure the network under the original pow model.
Mining rewards will no longer be distributed after the switch to pos, and as a result, annual Ethereum issuance will be reduced by approximately 90%. Ether’s price may rise if the law of supply and demand holds. Yet, the cryptocurrency market is unpredictable, and you shouldn’t take advice from untrustworthy, unspecialised sources.
If you think the Merge will impact Ether’s price to turn your investment into a fortune, don’t rush! No one can predict what effect this event will have, yet, many economists trust that there are positive ones we’ll see in the long term and after future upgrades.
Just take your conclusions, don’t invest more than you can lose, and always keep up to date with future events.
It's hard to predict what will happen in 2023
The future for crypto is unclear, and even though sharding is presumed to happen next year, no one can estimate the time. What's known, though, is that this will result from two phases.
While the waiting can be difficult, it's critical for Ethereum's long-term success and sustainability that the developers get these upgrades right. Investors should also pause to applaud the developers who finalised the Merge, as this and the improvements made to the world aren't easy tasks and shouldn't be neglected.
