The launch date for ETH 2.0, which was originally planned for 2019, will now likely take place between 10 and 20 September 2022, the Ethereum Foundation has announced. It had previously been pegged to either 15 or 16 September following the succes of the Goerli Testnet merge, which is the third and final testnet merge before the official Merge of the Ethereum mainnet.
ETH 2.0, now known as the ‘consensus layer’, will see the world’s second-largest cryptocurrency move from the energy-hungry proof-of-work (PoW) consensus mechanism to the leaner, greener proof-of-stake (PoS) system.
The Ethereum organisation says the upgrade will make the crypto “more scalable, more secure and more sustainable,” and that the changes are being implemented by teams “from across the Ethereum ecosystem”.
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What happens once The Merge is complete?
There is no way of telling what might happen after The Merge is finalised. It is possible that the system could stop working for whatever reason, or that the blockchain’s validators could act maliciously. This could lead to a significant amount of reputational damage for Ethereum, which could, in theory, lead to a serious market crash.
Read more: Die Zusammenführung – Ethereum.org
Even if that does not happen, people should be aware that scammers could take advantage of people through airdrop or support scams, while the status of non-fungible tokens (NFTs) on the new version of the system could be exploited to swindle people out of their money.
While The Merge is eagerly anticipated by holders and developers, that is not necessarily the case when it comes to ETH miners. These people are set to lose out on a fair slice of their income, which is why some of them have teamed up to create a proof-of-work version of Ether called EthereumPoW (ETHW). We don’t know what, if anything, could happen with that particular coin, but it will be worth keeping an eye on.
Also, once Ethereum moves to its new consensus mechanism, there is the risk that it could become just another proof-of-stake blockchain. While the main forces in that arena, such as Solana and Avalanche, have seen their coin’s prices drop over the last three months, we will have to keep track of their performance over the coming months, to see if they experience a post-Merge boost.
The three parts to ETH 2.0
Despite each part of ETH 2.0 being worked on in parallel, they have certain dependencies that determine the ETH 2.0 release date. The three elements are The Beacon Chain, The Merge and Shard chains.
The Beacon Chain, which brings PoS to Ethereum, went live on 1 December 2020. It is not yet incorporated into the mainnet and will run in parallel until the transition, or The Merge, takes place between 10 and 20 September 2022. Meanwhile, Shard chains will expand Ethereum’s capacity to process transactions and store data. Shard chains should ship sometime in 2023.
The move will also expand the network of stakers. Staking is the act of depositing 32 ETH to activate validator software. Validators are responsible for storing data, processing transactions and adding new blocks to the blockchain.
Coinbase, the American cryptocurrency exchange platform, describes staking as “the process of actively participating in transaction validation (similar to mining) on a PoS blockchain”.
The Merge is expected by the middle of September and will mark the end of PoW for Ethereum. PoW, which will still be used by the Bitcoin blockchain and some other cryptos, has been criticised for requiring huge amounts of computing power – and thus energy – to mine new coins.
Some crypto experts have predicted that Ether (ETH) will one day overtake Bitcoin (BTC) as the number one cryptocurrency, driven partly by its ability to run smart contracts – automated programs that execute actions when certain conditions are met.
Smart contracts are the backbone of decentralised finance (DeFi), which allows people without bank accounts to carry out transactions.
Call to arms
Ethereum is asking its community to help roll out the consensus layer upgrade, by helping with testing and earning rewards.
As ETH 2.0 is not a new coin, it will not change the ETH people hold. The Merge will most likely affect Ether miners more than holders, as the shift to PoS will see staking take over from mining as the means by which transactions on the Ethereum blockchain are approved.
In August 2021, Ethereum rolled out the EIP-1559 London Hard Fork network upgrade, or the Ethereum Improvement Proposal Process.
Ethereum has made strong “progress” towards ETH 2.0
Aleksandr Pacha, the CEO of CryptoWallet – a finance solution that allows users to spend crypto using a debit card – told Currency.com last year: “Ethereum has actually made huge progress towards ETH 2.0, the upgrade that will make Ethereum scalable and environmentally friendly. The major uptick in price we saw this year was largely due to EIP-1559, an upgrade that burns more ETH to make it a deflationary asset. The more the network burns, the scarcer it becomes.
“The long-awaited Merge, where Ethereum changes to proof-of-stake and consumes 99% less electricity, is expected to arrive in the middle of next year. Ethereum 2.0 has already experienced many delays, so it’s difficult to pinpoint an exact date – and the developers won’t give one! The final phase is also expected in 2022, splitting the network into 64 new blockchains to improve transaction times. It’s exciting stuff!”
Read more: Eth blockchain upgrade – Krypto-NFTs