Ethereum merge is one of the most anticipated events that will bring some major changes to one of the biggest blockchain systems, i.e., Ethereum. As the merge takes place, Ethereum will reduce its energy use and will become more energy efficient. The change has its proponents and opponents because of the possible implications. Either of the two groups supports or is against it because of the impacts.
One of the main reasons is the created problems for other blockchain systems as it becomes more energy efficient. Bitcoin might be on the direct receiving end as it operates using the Proof of Work mechanism, which is too costly for it.
Here is a brief overview of the anticipated event of the Ethereum merge and how it will impact Bitcoin.
Ethereum merge and resultant changes
As mentioned above, the Ethereum merge will bring a complete set of changes. These changes are not only for its blockchain system and tokens but for others. The major change is the transition itself, which means it will move towards Proof of Stake. Staking will reduce the amount of energy released due to performing operations. Also, it will reduce the number of computers required for the blockchain’s operations.
Ethereum price saw a speedy increase in value due to the enhancements drawing closer. The merge also impacted Ethereum Classic, which saw an enhancement in price value and remained a direct benefactor. The nearing deadline for the Ethereum merge has also increased chip prices across the globe. Chip manufacturers are aware of the need for these devices to maintain the Ethereum ecosystem and hiked prices.
The transition of Ethereum will reduce energy emissions by more than 95%. Some developers have said that it will be reduced by more than 99%, but it is too idealistic. ETH token price has reached doubled in the last two months due to the enhanced model of its ecosystem.
Implications for Bitcoin
The main rival of Ethereum, i.e., Bitcoin, might face threats to its existence because of the vital transition from Proof of Work to Proof of Stake. Crypto analysts suggest that the Bitcoin price might crash after Ethereum merge. The reason for the collapse of Bitcoin is the subsequent regulation that it might face after the merge. According to crypto analysts, Proof of Work, an energy-intensive method, was never necessary and led to non-necessary losses.
As Ethereum becomes more energy-efficient, its revenue will increase multifold. The reason is the small fees that the users would need to give to validate their transactions. Thus, the users will prefer to go for a blockchain that doesn’t require that big expense. Also, environmental activists will resist Bitcoin after the Ethereum merge.
The value of Bitcoin has seen a tremendous decline over the recent few days. Though Bitcoin made desperate attempts to enhance its value, it couldn’t succeed. One of the possible reasons for bearishness in Bitcoin value is Ethereum merge. The impacts won’t be limited to Bitcoin; other tokens will also be impacted, which are not as efficient as Ethereum. Thus, many blockchain systems will have to brace themselves for hard times.
One of the leading blockchain ecosystems, Ethereum, is soon moving to Proof of Stake. The transition has been named Ethereum merge, and it will impact various blockchains and their respective tokens. Bitcoin price has seen a considerable decline due to the nearing deadline for the Ethereum merge. Hard times might follow for Bitcoin once the merge process is complete.