After several years of buildup, the second-largest blockchain network, Ethereum, successfully launched its long-awaited Merge update on Thursday, Sept. 15th, 2022.
The upgrade saw Ethereum transition from a proof-of-work (PoW) to a proof-of-stake (PoS) consensus algorithm. Ethereum developers celebrated the upgrade alongside other prominent community members via a live streaming party, which over 40,000 people tuned in to watch as the Merge went live.
Ethereum has long been criticized for its low scalability, extremely high gas fees, and the environmental impact of its mining activity. However, with the recently completed transition, Ethereum will now rely on validators staking ETH to achieve consensus and secure the network, rather than mining.
The most notable change to the Ethereum ecosystem is the reduction in the network's energy consumption by a whopping 99.95%. Since the network will no longer rely on miners operating energy-intensive hardware, it will become much more efficient and environmentally friendly.
Ethereum co-founder, Vitalik Buterin took to Twitter to express his excitement about the success of the upgrade, saying it was "a big moment for the Ethereum ecosystem."
The Third-Biggest Event in the Crypto Industry
The Merge is a significant event not just for the Ethereum community but also for the entire cryptocurrency industry. According to Joseph Lubin, the CEO of ConsenSys, the Merge is currently the third most significant event in the history of the crypto industry.
"In terms of impact, in the history of our ecosystem, there have been two major events so far. The advent of Bitcoin and the development of Ethereum, a much more programmable and expressive blockchain technology. The slot's in as number three in my opinion," Lubin said.
Gilbert Verdian, CEO of blockchain firm Quant, echoed a similar sentiment, expressing optimism about the future of the blockchain industry following the Merge. He said,
"The Merge is a significant step forward bringing Ethereum into the mainstream, and it marks an evolution of blockchain technology. A smaller carbon footprint has long been an industry goalpost... Now that this is happening, we will see more institutional adoption where Financial Services turn to decentralised infrastructure."
Earlier this year, Vitalik Buterin admitted that the Merge was only one part of a multi-part plan to transform the ecosystem. With the Merge completed, the network will not focus on completing the next steps called the Surge, the Verge, the Purge, and the Splurge. These steps are all aimed at making the Ethereum blockchain more scalable and secure.
Ethereum Rallies Before Merge
In the weeks leading up to the Merge, the Ethereum market was dominated by bullish market sentiments. The brewing excitement within the crypto market for the Merge had resulted in massive accumulation of the digital asset as demand skyrocketed.
Several institutional investors began providing Ethereum staking services for clients clamouring to gain exposure to the digital asset and benefit from the expected price increase that analysts believe would come post-Merge.
Among these investors was the Swiss digital asset banking platform SEBA Bank, which announced that it has launched an Ethereum staking service for institutional clients to earn yields from staking on the Ethereum network.
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