On September 15, 2022, Ethereum’s long-awaited Merge was executed, marking the network’s transition from a Proof of Work (PoW) to Proof of Stake (PoS) consensus mechanism. As this content was written pre-Merge, any mentions of Ethereum using PoW are in reference to the network’s previous consensus mechanism, not its current one.
- Top 5 Misconceptions about The Merge
- 1. The Merge will Reduce Gas Fees
- 2. Transaction Speed will Increase Greatly
- 3. All Staked ETH will be Withdrawn after The Merge
- 4. The Merge will Result in Network Downtime
- 5. Running a Node Requires 32 ETH
- FAQs About The Merge
- Prepare For The Merge With Caleb & Brown
With The Merge attracting so much media attention and speculation, there are plenty of misconceptions spreading across the crypto community. In this article we debunk the five most prominent misconceptions about The Merge.
Before we dive into it, here’s a quick summary of what’s happening.
‘The Merge’ is the name of the event where the Ethereum blockchain will change its consensus mechanism from Proof of Work (PoW) to Proof of Stake (PoS). It’s known as ‘The Merge’ because it will involve the merging of the main Ethereum blockchain with a special purpose blockchain called ‘the Beacon Chain’.
Recommended Reading: The Merge is Coming: Everything You Need to Know
Top 5 Misconceptions about The Merge
1. The Merge will Reduce Gas Fees
This claim is, in short, inaccurate. However, The Merge could lead to decreased gas fees in the future. The Merge is a change of consensus mechanism, not an expansion of network capacity, and will not result in lower gas fees. This misconception stems largely from confusion between ‘The Merge ‘and what was known as ‘Ethereum 2.0’.
2. Transaction Speed will Increase Greatly
Though there will be some slights changes, transaction speed will mostly remain the same.
After The Merge, Ethereum’s block time will be marginally faster, from an average block time of 13.6 seconds to 12 seconds. This is a 12% increase in transaction capacity and thus a 12% reduction in gas cost. But this is considered a negligible amount that won’t make a material difference and so isn’t considered a lowering of gas fees.
3. All Staked ETH will be Withdrawn after The Merge
Staking withdrawals are not enabled with The Merge. Withdrawals will be introduced with the Shanghai upgrade, the next major Ethereum upgrade, which is expected to take place 6-12 months after The Merge. This is done for security reasons. Even when they are introduced, there are limitations set in place to limit the number of ETH that can be withdrawn each day.
4. The Merge will Result in Network Downtime
The Merge upgrade is designed to transition to PoS with zero downtime to disrupt the network or its users. The network should keep functioning as intended at all times.
5. Running a Node Requires 32 ETH
Anyone is free to run a node. No ETH is required. Not before or after The Merge.
There are two types of nodes on the Ethereum network – ones that can propose blocks and ones that can’t. Those that are not required to commit ETH do not propose blocks but they are also integral to the network’s security because they hold all block proposers accountable.
FAQs About The Merge
When is The Merge?
Ethereum’s final testnet Merge successfully took place on the Goerli Network on August 10. With this final test completed, The Merge has officially been scheduled for Ethereum’s mainnet. The Merge will be triggered at a Terminal Total Difficulty (TTD) of 58750000000000000000000. TTD is expected to be reached around September 15, 2022, around 12:00 UTC. However, this may vary depending on the variable hash rate, and the Ethereum Foundation has indicated the merge could occur any time between September 10-20, 2022.
Is The Merge Priced in?
The question on every investor and traders mind. And the hardest one to answer.
This is the most significant event of its kind. It comes at a time where crypto faces a bear market and is searching for a narrative to bolster the market. This psychological question is one best answered retrospectively than trying to predict the future. We'll be closely following The Merge and the price of ETH as it unfolds.
Is The Merge Risky?
It’s fair to say, there’s a lot at stake.
The Merge is considered one of the biggest events in crypto history because no blockchain has undergone such a significant change before. This brings with it a significant amount of technical challenges and risks of getting something wrong. But this is also why The Merge has taken so long and been delayed so often, as the Ethereum team has been thoroughly testing it for years to ensure they deliver.
Will there be a Fork of the New Ethereum Chain?
Potentially. Some miners are reportedly working to hard fork the chain - that is, to split the chain into a separate network that will continue using the PoW consensus mechanism. This would not be the first time Ethereum has undergone a hard fork; the most famous of which was the Ethereum Classic split in 2016.
Do I Need to do Anything to My ETH?
No. If you are using ETH on-chain or holding ETH, you don’t need to perform any actions during or after The Merge. As the upgrade is based on the protocol, there will be no direct impact on the users or holders.
If an application, exchange, or wallet you use offers additional instructions or recommendations, you should verify these are actually coming from them. Be on the lookout for scams!
Prepare For The Merge With Caleb & Brown
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Recommended reading: What is Ethereum? A Beginner's Guide
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