The most ambitious Ethereum [ETH] upgrade, which will transform the mainnet from the proof-of-work [PoW] to the proof-of-stake [PoS] mechanism, has sent jitters among investors.
Seeking to assuage traders’ fears, experts say the merge will bring in greater scalability while moving towards an energy-efficient with enough security and decentralization. Tushar Gandotra, founder and CEO, FiEx, a cryptocurrency-based startup, stated,
“The upgrade would result in a shift from an energy-intensive approach towards a green and environment-friendly approach, with insurance that the future scalability of ETH will be able to handle more transactions at a lower carbon footprint.”
On the price front, experts believe the upgrade will leave an impact on ETH price, as ETH use cases are expected to fall until the transaction fee reaches a stable rotational value. According to Punit Agarwal, founder, KoinX, a cryptocurrency taxation platform
“Staking rewards can rise by 50% from where it currently stands which will be beneficial for long-term investors,”
Market analysts also advised that ETH-oriented digital wallets may be required to update their nodes so as to keep up with the changes related to the merge.
Ethereum Merge Braced For Its Own “Y2K Moment”
That said, there are many unknowns about the Ethereum merge, scheduled to take place on September 22 with some equating it to the infamous Y2K hysteria.
The year 2000 problem or most commonly known as the Y2K bug was a computer flaw or bug, that was thought to cause problems when dealing with dates beyond December 31, 1999.
Such is the effect that even Coinbase Global, the largest US crypto exchange, announced recently that it will pause withdrawals and deposits of all Ethereum-based tokens “as a precautionary measure”.
Richard Galvin of Digital Asset Capital Management sought to address concerns by saying that any major change like the ETH merge comes with its own risks, but should not be given too much attention.
“We have a lot of faith in the development community in Ethereum and the program they’ve gone through to test it, but it’s not 100 percent certain,” he said.“If it goes well, you’d expect the reduction in risk should lead to potential price increases.”