Ethereum Merge: What You Should Know

Brandie E Blackler
9 Min read

Ethereum is the second most popular cryptocurrency, right under Bitcoin. Ethereum used to be known for its proof-of-work structure but recently switched to a proof-of-stake structure. The Ethereum merge is considered one of the most historical events in cryptocurrency history despite the recency of this change. 

Many people have concerns about the environment as climate change discussions continue to arise. That is the primary reason why Ethereum switched its model from proof-of-work to proof-of-stake. 

Please continue reading to learn more about the Ethereum merge and why it happened in the first place. We will also discuss the controversy surrounding this change, according to experts in the cryptocurrency industry.

Difference Between Proof-of-Work and Proof-of-Stake 

Proof-of-work is the way Ethereum used to function before the Ethereum merge occurred. In this situation, miners of Ethereum thrived in the crypto market because they had the energy needed to prove their ownership of their shares. Mining was the way that people verified purchases and transactions when using Ether before the Ethereum merge. 

People enjoyed this model because they received crypto as compensation for their mining tasks. Meaning, people who used mining to earn money in crypto can no longer do so with Ethereum. However, there are plenty of other cryptocurrencies with which miners can still work with. 

The Ethereum Merge: Impact on Crypto Mining 

The Ethereum merge is complete, so miners are no longer needed to run the blockchain. This is frustrating for people who have mined Ethereum ever since the inception of this cryptocurrency. Another concern for people who mine cryptocurrency is the fact that other cryptos might follow in Ethereum’s footsteps. 

For instance, Bitcoin is still the top cryptocurrency worldwide, and they use a proof-of-work system as Ethereum did before the merge. If Ethereum surpasses Bitcoin then there is much speculation that more cryptocurrencies will switch to the proof-of-stake model.

Based on environmental factors it appears the new model is better for the environment than the proof-of-work model. 

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Environmental Benefits of the Ethereum Merge 

Energy consumption is a huge concern for people who are concerned about the environment and climate change. It's no secret that crypto mining contributes to a lot of energy consumption because they use the proof-of-work model to prove the coin’s legitimacy. However, after the Ethereum merge, energy consumption for this cryptocurrency has been cut down significantly. 

Ever since Bitcoin and Ethereum rose to their height of popularity, there's been concerns about energy consumption related to these cryptocurrencies.

Ignoring these concerns would not be a good idea for major cryptocurrencies because it could impact their business model. Too much energy consumption creates greenhouse gases that wear down the atmosphere, which is a very common concern as of late. 

Why Is The Ethereum Merge Considered a “Historical Event”? 

Many people consider the Ethereum merger a historical event because it marks big changes in the crypto industry.

During this event, watch parties were hosted in the community for people to observe the change as it happened. People wonder if other cryptocurrencies will also switch to a proof-of-stake model following Ethereum, but as of now, it's too soon to say. 

Cryptocurrencies have a huge impact on today's economy because many people both trade and invest in crypto every day.

Whether it's Bitcoin, Ethereum, or a smaller-cap cryptocurrency, big changes in this industry are notable. Any changes in the way our money works and functions are something that people would typically consider a historical event. 

Alternatively, in the new proof-of-stake model, the people rewarded for their efforts are people who stake the most Ether instead of mining them. The proof-of-stake crypto model does not consume nearly as much energy as the proof-of-work model.

So, people concerned about climate change may be more inclined to purchase Ethereum over cryptocurrencies that use proof-of-work. 

Will Other Cryptos Go Green? 

After the Ethereum merger, many other cryptocurrencies are sitting back and watching to see how the results play out.

Energy consumption in the crypto industry has been a massive concern for years now, but people are still unsure about how the proof-of-stake model will play out for Ethereum. People have tried to make the proof-of-work model function greener but, unfortunately, haven't found success. 

The changes between proof-of-work and proof-of-stake are major, so it might be a while before we see other cryptocurrencies follow suit.

Generally speaking, traders and investors are interested in energy-efficient cryptocurrencies to help improve the environment and reduce greenhouse gases. 

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Conflicting Opinions About The Ethereum Merge 

The Ethereum merge has been a hot topic in the cryptocurrency world since the announcement of the change to proof-of-stake.

During the past year, the cryptocurrency market fluctuated significantly even before the merger occurred. Despite the caused fluctuation in the crypto market at the moment, many people are taking sides as to whether or not the Ethereum merger is a success. 

Investors and professionals in the field want to stay on top of the information and form their opinions quickly.

So, on one side of the argument, you have people stating that the Ethereum merge will be extremely profitable. However, on the other side, many people believe that this large change could be detrimental to the success of Ethereum. Only time will tell which side of opinion is correct. 

Generally speaking, people are typically resistant to change, even when the change is wanted and sought out by critics in an industry. People who spent years mining Ethereum under the proof-of-work model may see the proof-of-stake model as a negative. 

Alternatively, people concerned about the environment and greenhouse gas emissions may be inclined to start investing in cryptocurrency and increase its mainstream potential overall. 

How to Trade the Ethereum Merge? 

Given that the Ethereum merge is a very recent event (September 15, 2022), traders and investors interested in the cryptocurrency market may see this as a good time to either purchase ETH for the long term, or trade on the price fluctuations in the short term. 

It should also be mentioned, trading any cryptocurrency comes with a high amount of risk and the individual should always practice appropriate risk management in any of their trades. 

In regards to cryptocurrency CFDs (Contract for Difference), the trader can both trade on the price difference when it is predicted to go down (Sell), or predicted to go up (Buy).

You can read more about CFDs in order to understand them better if needed. It is important to remember that CFDs are considered derivative products based purely on speculation. 

To get an idea of ETH’s price fluctuations based on Daily movements, the live TradingView chart of ETH against USD is available to view, below: 

Please note: Past performance is not a reliable indicator of future performance or future results. 

Ethereum Merge: Conclusion 

The Ethereum merge is still new and the general economic climate has fluctuated significantly over the past few years. As of now, it's difficult to say whether or not this massive change will spread to other cryptocurrencies. These changes may attract some investors but repel people who have mined Ethereum for several years. 

However, even though critics are still unsure about the impact of the Ethereum merge, there is no doubt that this change is better for the environment. Many people wonder how Bitcoin will respond to the changes made by Ethereum recently, but only time will tell. 

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