Ethereum's long-awaited “Merge” is expected to occur around Sept. 15 and is heralding fresh interest for the platform as it transitions to proof of stake from proof of work.
The Merge is considered the most significant upgrade in Ethereum's history that is expected to reduce the platform's energy consumption by 99.95%.
Considering the benefits and the risks associated with the upgrade, many cryptocurrencies, and stock investors are cautiously waiting for its implementation.
Benefits Vs. Risks
The Merge is expected to eliminate the need for energy-intensive mining. Instead, it secures the network using staked Ether, the platform's signature currency and the second-most valuable digital asset after Bitcoin.
The process is tipped to pave the way for scaling upgrades and help solve Ethereum's biggest problem: the substantial fees required to use the network.
Unfortunately, along with the benefits come the dangers of proceeding with The Merge.
Ethereum is attempting a complicated process, which is probably why it has been delayed for years since it was unveiled more than eight years ago. Crypto venture investor Christopher Calicott said,
"Any time you make changes to a complex system, unintended consequences must arise."
Chandler Guo, a crypto industry veteran who leads a group opposing The Merge, noted that "it's very difficult. It's very dangerous." According to crypto experts, a change of this scale could also make Ethereum vulnerable to hacks or other disruptions.
Public Interest
There are 12 public companies with Ethereum on their balance sheets, holding a combined 212,513 Ether (current market value = $325,994,942).
However, most of these entities are not on major recognizable exchanges. The exceptions are Coinbase (NASDAQ:COIN) Global, BTCS (NASDAQ:BTCS)), Meitu (HK:1357), Galaxy Digital Holdings (OTC:BRPHF), and Mogo (NASDAQ:MOGO).
The remaining seven entities, which can be found in over-the-counter or smaller exchanges focused on promoting black-swan type firms, include Neptune Digital Assets Corp (OTC:NPPTF), Ether Capital, HIVE Blockchain Technologies (NASDAQ:HIVE), BIGG Digital Assets, Digihost Technology Inc (NASDAQ:DGHI) and CYPHERPUNK HOLDINGS INC (CSE:HODL).
Considering the scale of The Merge, it could either make or break some of these small-cap companies and retail users. Failure of the upgrade could imperil thousands of crypto applications that operate using Ethereum, which collectively handle more than $50 billion in user funds.
Because the process is surrounded by uncertainty, many predictions for what will happen once the upgrade is started are rooted in speculations. Regardless of the result, The Merge brings about plenty of attention to Ethereum, and some traders expect the lead-up to the upgrade will see Ether prices rise in the short-term to between $1,850 to $2,000, Blockworks reported.
Ether has already outperformed Bibcoin in the past few weeks due to the hype surrounding the upgrade. The number two crypto is up around 47% over a 50-day period to about $1,500 on spot markets, while bitcoin remains relatively flat, trading near $20,000.