In the current month, Ethereum revealed that the Bellatrix update is coming. It is considered the first-ever major update scheduled for the Merge; the second one is known as the Paris update would ultimately transform the network from the Proof-Of-Work (POW) mechanism to the POS consensus mechanism. It stands at number two in the list of cryptocurrencies, with Bitcoin at number one being the most commonly known cryptocurrency effortlessly tradable via Bitcoin Circuit.
Simply put, Ethereum’s switch to the Proof-Of-Stake, perhaps the most predicted occasion in the crypto world, is very near in the future. While the most foreseeable shift offers Ethereum users so much to enjoy, it may also cause hacks, threats, and fines to some people.
What Is Meant By The Merge?
In simple words, Merge is a long-term Ethereum update whose purpose is to make the network more efficient and effective. These updates are usual, but this one is of vital importance to date, and its results would smooth the path for developers to announce a host of the latest functions to the network.
This merger will occur between the mainnet of Ethereum and the Beacon Chain. Recently, both chains have been parallel to each other. But the mainnet of the Ethereum network that utilizes the POW consensus protocol makes the transactions work. After the completion of the Merge, the Ethereum network will switch from the POW consensus mechanism to the POS algorithm that belongs to Beacon Chain.
Here are some tips for crypto users to follow (Merge).
Don’t Do Anything During Switch
An individual possessing Ether on any crypto exchange or in his crypto wallet is not required to make any special arrangements for the Merge. Some well-known cryptocurrency exchanges like Coinbase and Binance ensure that users’ holdings are secure in their digital wallets during the update. In this case, an app, crypto exchange, or digital wallet gives supplementary instructions; ensure that all these instructions belong to valid sources.
Besides this, stay cool and calm if your Ether holdings become unusable before, during, or after the Merge has been completed. It may happen due to temporary termination of operations such as deposits, borrowing, lending, and withdrawals by reputable exchanges.
Be Careful In Case Of Hard Fork
You might hear some rumors regarding the hard fork after the Merge. It will happen because the switch toward the Proof-Of-Stake consensus mechanism will prevent the miners from generating revenues and makes their mining hardware (computer networks) futile.
Thus many impactful mining institutions have proposed to keep going with the POW mechanism after the transition to Proof-Of-Stake, creating a fork in the blockchain. If the fork takes place, it will form PoWETH. Although the chances of a hard fork are minimum, their ruling out is not possible. If this happens, cybercriminals (scammers & hackers) will see it as a chance to defraud unwitting traders and investors.
Rogue traders can trap Ethereum holders to buy PoWETH or transmit currency to an irregular crypto wallet address to finish the update and fade away after getting the currency. Many platforms would utilize snapshots of crypto users’ possessions to grant an equivalent amount of power in the event of a hard fork. They would also come up with formal commands if an uncertified fork gets stuck.
Instructions For Nodes
Once the Merge is done, nodes must operate an execution layer along with their consensus layer users. Ethereum has opted for this multi-layer system for security purposes. Failure to follow the latest instructions may cause higher fines.
Merge – Big Deal
Ethereum is the most widely used network and fuels Ether. It also hosts several DApps & DeFi protocols and develops the validity of a massive number of NFTs.
This indicates that the Merge results will influence the Ethereum network and a wide range of goods and services that depend on it. Considering the size and impact of Ethereum, the destiny of the Merge will impact the more significant crypto sector. At the same time, the transition to the POS consensus mechanism will influence many individuals involved in Ether mining, many of whom have invested massive capital in the effort. For miners, the Merge is not something suitable.