The Ethereum Merge and how it affects ETH users

The Ethereum Merge is the long-awaited update to one of the world’s most popular networks. It is bound to be the new standard for trading, ownership, and use for Ether (ETH) and all tokens built within its ecosystem. 

Newcomers to the crypto scene are likely to not have heard of this event and why it’s so important. If you are one of them, Gamdom gives you a quick guide on what it is and what it means for ETH users:

What is the Ethereum Merge?

The ‘Merge’ is easier to understand with context. Originally, there was only one Ethereum mainnet which was built on the same systems as Bitcoin (BTC) but with smart contracts. However, its systems are outdated and cannot keep up to scale with its growing users. 

Thus, the developers, together with co-founder ​​Vitaly Dmitriyevich ‘Vitalik’ Buterin, created a second Ethereum network. This is called Ethereum 2.0 or the ‘beacon network’ which functions the same as the mainnet but with systems better suited for the future.

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The Ethereum Merge is a milestone the development team aimed for since creating the beacon network. It’s the event when all contents of the mainnet are migrated to Ethereum 2.0 then terminating the life of the original network forever. When it happened, the beacon network became the new mainnet, replacing all old systems with more efficient tools for users.

When will Ethereum Merge occur?

The ETH Merge already happened on 15 September 2022 with no major issues for users so far. ETH and its ERC-20 tokens still function exactly the same way as before and their market rates are unchanged. The team predicted that there should be a surge of new users after the Ethereum Merge event but it appears to take time because the market is currently bearish. Bullish trend is forecasted to arrive in spring which is usually what happens every year. 

What does The Merge mean for ETH users?

For everyone familiar with ETH, the Merge Ethereum implemented only means they’re using the beacon network. Newcomers to Ethereum will find it easier to understand what this means for users by focusing on the changes. Here’s what the Merge means for ETH users:

Need to update clients 

Ethereum can be interacted with using the standard client that it came with since the genesis block was mined. However, the new system will have different infrastructure than the previous one. Thus, everyone needs to update their client if they wish to continue using the network. 

This is a simpler step than last time when both the old mainnet and beaconnet were two parallel networks. Users had to migrate their content between them to use the other’s features. The Merge removed the need to convert your assets because the Ethereum team already did it for you. Updating the client is all you have to do to keep going.

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No more miners and less energy consumption

The biggest appeal of the beacon network which the development team was aiming to double down on is its new proof-of-stake (PoS) system. Originally, Ethereum operates using a proof-of-work (PoW) system where the network gets its processing power from miners. 

Miners can be described as volunteers who host a node of the Ethereum network. Each node works fast and automatically to mine blocks which handle transactions made. Successfully making a block pays the owner of the node which makes mining one of the most lucrative investments in the crypto industry. 

However, mining is seen as a competition because a node’s chance of success is determined by how powerful a miner’s rig is. Thus, the need for more processing power escalated as the number of miners grew. Ethereum switched to PoS to deescalate power consumption and makes ETH rewards for supporting it more accessible to people on a budget. 

PoS replaced miners with stakers. Instead of having to make an expensive rig, they only need to lock up 32 ETH on the blockchain. This creates a node in a low-end device that can connect to the internet 24/7 like a laptop. Energy consumption has dropped by 99.988%.

Staking is the new trend

Staking is also more fair because the system chooses at random which node to create a block but favouring those who haven’t been selected yet in a certain timeframe. Stakers are also called ‘validators’ because the main job of their node is to help validate transactions in the Ethereum network. 

Validators don’t need to build a rig or pay electricity bills to support Ethereum. Instead, they can continue staking by depositing 32 ETH whenever they wish. Thus, the same person can maintain multiple nodes and all it takes is one laptop to be connected 24/7. 

ETH use is still the same for users, traders, and gamblers alike

The Merge didn’t change any major aspect of ETH in any way other than how it’s moved from PoW to PoS. Users can still store and transfer Ethereum-based assets the way that they are used to. Popular wallets like MetaMask and Coinbase Wallet didn’t have to make any major change to accommodate it, either.

Ethereum Merge gambling is brought up from time to time but no online casinos have announced any issues. The payout rate, deposit and withdrawal limits, and bonuses work exactly the same. There is the exciting idea of an Ethereum Merge casino development becoming a lot more plausible in the Metaverse. Other than that, Ethereum has no direct impact on any of its uses. You can, however, look forward to the forecasted profit as an investor in the network when crypto prices increase as new users join its ecosystem. 

FAQ 

What is the intent behind the Ethereum Merge?

The original reason for the merge is to make PoS the new standard system for Ethereum. It’s a necessary change to lessen Ethereum carbon footprint and bring ETH to the new age of crypto trading. 

What is The Merge’s effect on ETH gambling?

The Merge has no direct effect on gambling other than making ETH more valuable in the future. Gamblers who win ETH from crypto casinos can cash in when newcomers surge the market. 

Can I be a staker for ETH?

Yes. All you need is a device you can connect to the internet 24/7 and 32 ETH to lock in a node. This can be a laptop, a desktop, or a smartphone as long as it can install an Ethereum client. 

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Words: Clarence Clarke