Ethereum Merge: Countdown to ‘most anticipated event in crypto’s history’ is underway

After more than two years of development, Ethereum is less than a month away from the biggest upgrade in its seven year history.

Known as the ‘Merge’, the event will see the world’s second largest cryptocurrency switch its underlying technology from a proof-of-work system to a proof-of-stake. This means that mining Ethereum’s ether currency will no longer require powerful computers to perform complex calculations and instead rely on holders to verify transactions and validate the network.

By some estimates, this update will reduce Ethereum’s electricity consumption by a factor of 1,000.

The Merge has been described by some commentators as “the most anticipated event in crypto’s history”, and has resulted in a major price rally for Ethereum despite a broader downturn for the overall cryptocurrency market. Although still a long way off its peak, the anticipation surrounding the Merge saw Ethereum more than double in price between June and August.

A successful dress rehearsal of the Merge earlier this month was the last major test before the transition on 15 September, with a subsequent price surge suggesting confidence in the switch remains high.

Other cryptocurrencies and projects underpinned by the Ethereum network also saw gains and increased investment from institutional investors, according to market watchers.

“The defined pace with which investors are injecting cash into the Ethereum-linked products is based on the clarity that now surrounds the Merge event,” said Fuad Fatullaev, co-founder of Web3 platform WeWay.

“Once the merge is live, it will herald a whole new ecosystem for Ethereum as it will now be more energy efficient, more scalable, and generally more usable across the board. Investors, particularly institutional buyers, will prefer Ethereum to bitcoin, and the overall potential accounts for why there is an ongoing upsurge in ether’s price at the moment.”

Some even believe it could finally fulfill the hypothetical “flippening” that would see Ethereum overtake bitcoin as the world’s most dominant cryptocurrency.

Speaking to The Independent more than four years ago, one industry expert said the use cases of Ethereum compared to bitcoin would see it eventually surpass its more famous rival.

“From the get-go it was a more versatile tool,” said Hubert Olszeweski, director of Blockchain Board of Derivatives, highlighting its ability to enable applications like smart contracts, as well as underpin the arrival of new Web3 protocols that could transform the entire internet.

The upgrade to a more environmentally friendly technology makes it even more appealling as a platform to build off, according to some analysts, especcially considering that attempts to do the same thing for the mining system of bitcoin have so far failed. Some critics of proof-of-stake claim that it would lead to more centralisation and potentially even greater government interference.