The Merge wasn’t a significant occurrence just for the Ethereum network. One of history’s most eagerly awaited events had happened, and the whole crypto sector rejoiced. The network’s switch to Proof-of-Stake [PoS] from Proof-of-Work [PoW] is viewed as revolutionary by some and harmful by others. The majority of the cryptocurrency community was excited to see how this initiative plays out for the network, despite the fact that Bitcoin maximalists and ETH miners weren’t on board with this shift.
Vitalik Buterin and Joseph Lubin, the creators of the world’s second-largest cryptocurrency, were busy celebrating and thanking everyone involved in the process. While doing so, several of them praised the smooth conversion of the ETH network to PoS. Eli Ben-Sasson, the president of StarkWare, compared the Webb Telescope to the Merge on Twitter.
Along with all the compliments, there was also criticism. As was already indicated, many have noted that ETH was breaking the rules of the cryptocurrency market by allowing the Merge.
Samson Mow poked fun at Ethereum’s seamless conversion to PoS and commented,
“ETH fanboys watching the Merge with anticipation is funny. There can be no technical failures in Ethereum because Ethereum’s existence isn’t predicated on any technology – it already failed in 2016 with the DAO fork. What exists today is a database run by a marketing company.”
SEC to get involved post-Ethereum Merge
Amidst this historic event, Gary Gensler, the chair of the U.S. Securities and Exchange Commission (SEC), reiterated his support for monitoring on Thursday by stating that staked cryptocurrencies may be governed by federal securities laws. This comes after Ethereum switched to a similar system.
The Wall Street Journal quotes Gensler as saying that proof-of-stake (PoS) blockchains, which create new coins for creators who pool their holdings, take on characteristics similar to investment contracts and may fall within his agency’s jurisdiction. The Journal reported that the man claimed he wasn’t referring to a specific coin.
However, the remarks, which came hours after Ethereum successfully completed its PoS shift through the Merge, suggest that the significant technological improvement may have more effects on the second-most popular blockchain than only reducing its energy consumption. Its native ether currency was one of only two cryptos, along with bitcoin, that was explicitly classified as commodities by federal regulators as a proof-of-work chain.