That ether ETH/USD “Merge” is scheduled to take place early Thursday morning (September 15) between 1:00 a.m. and 2:00 a.m. EDT.
The event will be a culmination of years of work by Ethereum’s core developers. After several shifts, the proof-of-work and proof-of-stake Ethereum networks that have been running side by side so far will finally merge into one. The impact will be enormous.
See also: Ethereum Classic Rises As Ethereum Approaches Fusion: What Happens?
Will ETH become more energy efficient?
Perhaps the key point about fusion is that the network becomes much more energy efficient. Crypto mining consumes enormous amounts of energy. The move from proof-of-work to proof-of-stake will completely free the network from mining and reduce energy consumption by 99.95%.
This is more than just good for the planet, it is also good for the Ethereum narrative. Investors who previously would not touch cryptocurrencies due to ESG standards or other moral dilemmas related to harmful mining practices are now relieved of this burden. Think Tesla putting it down Bitcoin BTC/USD and citing concerns about energy consumption from mining. As Ethereum offers a cleaner solution, it could even garner a run on Bitcoin’s market cap.
Will ETH become deflationary?
The merger will also result in a deflationary supply of Ethereum. In the Proof-of-Stake network, miners are rewarded with ETH for verifying blocks. However, after the merger, there will be no ETH rewards for miners, reducing supply. Miners have also had to cover the cost of their expensive hardware and energy consumption, which often results in them selling their ETH reward and putting ETH under pressure. Instead, token issuance for validator rewards will drop from 4% to 0.4%. With a burn rate of around 2% thanks to EIP-1559, Ether is likely to deflate at around 1.5% annually. And as miner selling pressure falls away, ETH could see a bullish move higher.
Are transactions becoming cheaper?
