15th September 2022 > > The Merge.

tl;dr

The Merge is complete!

Market Snap

Market Wrap

Cryptos selling off a touch as risk markets remain vulnerable to further inflationary shocks.

Curious Cryptos’ Commentary – The Merge is complete!

Under an hour ago The Merge was successfully executed.

For those who have a real-life outside of cryptos, this marks the merge of the consensus layer known as the Beacon Chain which uses Proof-of-Stake (PoS) consensus, with the execution layer which until now was using Proof-of-Work (PoW) consensus.

This has two immediate impacts.

Firstly, for the environmentally conscious, energy usage will decrease by approximately 99.95%, as miners no longer compete to create the next block, but are chosen at random to compile the next block. To be eligible miners stake ETH with the probability of being chosen directly proportional to their stake.

There are some who see this as inherently a good thing, there are others who disagree. The former tends to be those who are less nuanced in their arguments.

Secondly, the emission of new ETH will be reduced by 90% for each block, dramatically impacting the previous inflationary economics of ETH. All other things being equal, that can only be positive for the price of ETH relative to the broader crypto and other risk asset markets.

However, contrary to popular opinion, The Merge will not impact gas fees or transaction times, but it sets the stage for further development. Eli Ben-Sasson, StarkWare President explains:

“It starts a chain reaction of changes. The end result will be the very broad use of Ethereum’s computing power, and the general population using blockchain-based apps in many different areas of life.”

Which is a fine end goal, and we will get there, but even enthusiasts like me admit that we are still some years (not decades) away from this promised land.

…

Vitalik has described the next steps as The Surge, The Verge, The Purge, and finally The Splurge (aka the fun bits).

As a special offer to our loyal readership, please find here a cut-out and keep guide that is worth laminating to have as a handy reference at all times of the day and night:

Curious Cryptos’ Commentary – ETH hard fork

I am sticking with my plan to do nothing for at least the first 24 hours. I heartily recommend you do the same.