The Ethereum Merge is set to occur later today with the energy-efficiency focused transition expected to have a major impact on crypto investment and adoption, experts say.
Speaking to Cointelegraph in the lead up to the Merge, StarkWare president and co-founder Eli Ben-Sasson noted that the Ethereum Merge will be the “first step in a process that will lead to exceedingly widespread adoption of Ethereum.”
The immediate importance of the Merge is the dramatic effect on energy consumption.
The Merge is expected to see Ethereum’s energy cut by 99.95% compared to its current Proof-of-Work (PoW) consensus mechanism, which requires large amounts of energy to be used in a competition to solve arbitrary mathematical puzzles.
“I think of the Merge like the development of the first solar fields,” added Ben-Sasson.
“We saw that we can slash the environmental impact of electricity production. We didn’t say ‘problem solved,’ but rather that if we’re generating electricity with less pollution, it’s time to double down on efforts to use the power more sparingly.”
Excited to never have to hear about “ommer blocks” again.
(ok fine I know “ommer” was meant to be a gender-neutral replacement for “uncle”, but come on, it just *sounds* like an insult for people who meditate)
Oh, and saving electricity. That’s cool too.
– vitalik.eth (@VitalikButerin) September 14, 2022
Ben-Sasson believes the end result where the general population uses blockchain-based apps in many different areas of life, “and as naturally as people use smartphone apps today.”
CEO of crypto exchange Coinjar, Asher Tan says the Merge is set to change the narrative around crypto more broadly, pointing out that it’s incredibly rare for a tech sector to “execute such a drastic reduction in their energy intensity.”
“We believe that people are underselling the significance of the post-Merge 99.95% drop in energy usage,” noted Tan.
It makes the Ethereum network far more publicly palatable and opens the door for investors and companies that had remained crypto-agnostic due to its carbon footprint.
Despite optimism about Ethereum’s transition, there is still debate on whether the Merge has already been factored into Ether (ETH) price or not.
Charmyn Ho, head of crypto insights at crypto exchange Bybit, says their analysts have concluded there is “no consensus” amongst institutional investors or market makers regarding short-term trading around The Merge, but will instead be more likely to accumulate ETH and become hodlers.
Meanwhile, most within the Ethereum “bubble” don’t appear to be concerned over whether the Merge will be a success or not.
Ethereum Co-Founder Joseph Lubin told Bloomberg yesterday he believes the transition will result in very little disruption to developers and users, and will be “as smooth as if your iPhone or laptop has upgraded its operating system overnight.”
StarkWare’s Ben-Sasson also sees the transition being a smooth one, suggesting the “Ethereum Foundation has prepared so meticulously for this moment, and inspires lots of confidence,” noting:
“It will be a significant mark of success when the first block is produced by proof of stake. But this is like completing the launch of a rocket – we still have the rest of the journey ahead of us, which will pose its challenges.”
Lubin suggests that in his opinion, this is the third most important event in the crypto space, behind only the development of Bitcoin and Ethereum.