There’s a diamond shaped hole in the earth that’s getting unknowingly deep, and we’re all staring into its depths with minds grown ragged with questions. “The Merge,” which promises a move from the old proof-of-work consensus model to the proof-of-stake, is coming on in a week’s time, if promises from a notoriously poor-predicting posse of crypto proponents can be believed.
Late on Monday, co-founder of the Ethereum blockchain Vitalik Buterin wrote on Twitter that those working on the platform expect “The Merge” to finally happen somewhere between Sept. 13 and 15. The blockchain performed the so-called “Bellatrix” hard fork, which essentially sets up the POS consensus layer to combine with the Ethereum mainnet.
The people behind the Ethereum blockchain originally dated their merge for Sept. 19, and despite years of delays and delays and delays, it seems like there is something of a firm target in sight. Last month the blockchain ran final tests on its transition, giving the green light to go ahead for the merge.
Those championing the POS model, such as the creator of the Ethereum blockchain Buterin, have said this will result in a much less power-hungry chain. The Ethereum Foundation and other evangelists, like the ethereum-based scaling platform company polygon, said it will reduce power usage by over 99%.
Change is hard, even in the most opportune circumstances, but with as much money that’s riding on Ethereum, namely well over $192 billion, you can bet there’s loads of crypto bros who are doing more than clutching their pearls. Some crypto analysts are expecting the price of ether to jump just before the merge and then decline rapidly post-merge. Even though there’s less than a week to go, more than a quarter of all the Ethereum nodes weren’t ready to accept the Bellatrix upgrade in the hours before it went live, according to data from Ethernodes. The Ethereum Foundation has said those node operators who didn’t make the switch won’t be able to send ether or operate on the post-merge network.
And there’s so many questions that will likely only be answered once the merge rolls around. Some companies have suggested it could potentially lead to a very complicated tax situation, depending on if it results in a hard fork—AKA a mitosis-like splitting of the chain that results in two concurrent networks.
But there are many ether operators who are thinking it wouldn’t be such a bad thing to operate on an offshoot network, so long as they don’t have to deal with proof-of-stake. Those operating on this old network might find a real big difficulty mining for crypto on the old, cumbersome version of the pre-fork blockchain. Though that’s not to say disgruntled users of old versions of Ethereum haven’t stuck it out on older models. In fact that’s exactly what happened back in 2016 with what’s known as Ethereum Classic, when hackers disrupted the chain and led the founders to create what’s currently the main Ethereum network. There are many folks who still support classic, calling it akin to the “true Ethereum.”
Crypto mining companies, who have long-depended on proof-of-work, are already antagonistic to the whole concept of the merge. And though there will likely be some smaller mining operations that will throw in the towel, the most lucrative mining companies aren’t going to simply turn their rigs into plowshares just because the second-biggest blockchain network stops supporting their power-hungry operations.
CEO of Bitcoin miner White Rock told Cointelegraph in an interview that they expect miners to make a big push for other coins. Similarly, HIVE Blockchain, one of the industry’s larger mining companies, announced Tuesday it will look to other alternatives that could be anything from Ethereum Classic or even Dogecoin. All this will probably lead to less returns overall and weaken the status of ether, but it will certainly also reduce the overall environmental impact of the transition to POS, especially over time. The reason why blockchain networks like bitcoin are so taxing to mine is because they have become so bloated it takes a massive amount of computing power to add new data to the chain by solving ever-more complex math equations (AKA the proof-of-work consensus mechanism).
Well-known China-based crypto miner Chandler Guo has suggested they’ll make a POW Ethereum blockchain fork viable, along with its own kind of POW-based token. Smaller crypto exchanges have signaled they’ll continue to support crypto working on supporting the supposed ETHW or ETHPOW, or whatever the hell any of these groups of ETH diehards plan to actually call it. Even Binance, the world’s largest exchange by trading volume, hasn’t ruled out supporting an old version of the POW system. The exchange also said it would credit new ETH tokens to accounts in case of a fork.
As much as these individual pieces of the greater conversation might not amount to much, knowing how much a small group with a big mouth can woo people looking to make a fortune on digital currencies, there could be a whole lot of new (likely ill-conceived) ETH-based projects coming down the pike.
And while Ethereum Classic proponents are waving their arms like a balloon man outside a used car dealership, proclaiming Ethereum Classic will surge after the merge, the ever-fracturing crypto community might be split even further between old ETHeads and POW defenders.