Analysts believe that Ethereum’s merge can fail, but there are very faint chances of this happening, akin to negligible but one cannot say that the merge will be 100 per cent success.The upgrade is crucial as it reduces Ethereum’s energy consumption by over 99 per cent.
TOI.inEthereum’s much-awaited software upgrade, termed as ‘the merge’ is merely a few hours away from completion. The biggest fear looming over the crypto community is – what if the process fails?
Ethereum is slated to change its mechanism to proof-of-stake (PoS) from existing proof-of-work (PoW).
Analysts believe that Ethereum’s merge can fail, but there are very faint chances of this happening, akin to negligible but one cannot say that the merge will be 100 per cent success.
The upgrade is crucial as it reduces Ethereum’s energy consumption by over 99 per cent. The final stage of the upgrade and shift to the PoS mechanism began on 6th September on the mainnet, closely evaluated by the developers.
Did you Know?
From tracking sustainability of products to monitoring pollution, environmental researchers are now finding blockchain’s use in solving the climate crisis.
View Details »Hundreds of billion dollars tied to this ecosystem will fall under some uncertainty if there is any issue in this process, but experts see miniscule chances of the failure in upgrade and hope things will pan out smoothly.
Edul Patel, CEO and co-founder, Mudrex, said the nodes appear to be stable and the merge will continue to happen till there is stability. The testnet had already transitioned smoothly. There is an almost negligible chance for failure.
“The merge has been preceded by rigorous planning and extensive test runs leading into the event. It is, therefore, highly unlikely that major issues may arise in the event” said Vikram Subburaj, CEO, Giottus Crypto Platform, who anticipates a smooth process.
Ethereum’s transition from proof-of-work to proof-of-stake will mark the first experiment of its kind. Success of the merge will represent a massive feat of engineering and human coordination.
However, a failure would mean wiping out of value worth billions of dollars, which had happened when Terra Foundation’s LUNA and stablecoins USDT failed in tandem, eroding about $30 billion from the investors kitty.
During the transition, the present Ethereum mainnet will continue to run normally. Ethereum will run as a PoW network till the next merge date is announced, experts said.
Any problems during the integration could cause the entire network to go down temporarily, which may lead to brief panic in the market and lead to heightened volatility, Subburaj said. “If the merge ‘fails’, it will only postpone the inevitable to another day.”
Any technical glitch or setback would halt the transition and has the potential to bring down the price of Ethereum, Patel said. “However, the market has already corrected much, there is not a lot of room for further steep downside in it.”
The merge is moving forward because its core developers and other stakeholders have run through over a dozen successful tests and merge simulations, which are the shadow tests.
Market experts said that the software upgrade is extremely unlikely to happen and if the worst happens, there might be some volatility in the token for near term but long term investors have nothing to lose.
A user has nothing to lose, said Mudrex’s Patel. “The underlying technology and the Ethereum ecosystem already have the most apps built on top of it.”
“If the merge fails, it might lead to a significant drop in the price of ETH. However, any impact of this will be short-lived as the roadmap for Ethereum remains robust,” he said, echoing the similar tone.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Wednesday, 14 Sep, 2022Experience Your Economic Times Newspaper, The Digital Way!Read Complete Print Edition »
- Front Page
- Pure Politics
- ET Markets
D-St Bulls Continue Run; Nifty Reclaims 18,000
India’s stock indices extended gains to the fourth straight day on Tuesday with the Nifty breaching 18,000 for the first time in over four months, tracking continued upsides in global markets.
Vedanta, Foxconn to Set up Fab & Chip Facility in Gujarat
Vedanta and Foxconn said they will invest over ₹1.54 lakh crore to set up a display fabrication and semiconductor manufacturing facility in Gujarat.
What’s Stopping India Inc from Investing in the Country, FM Asks
Finance minister Nirmala Sitharaman on Tuesday asked India Inc to shed its hesitation and start investing in the country that was seeing growing interest from foreign investors. “This is the time for India…We cannot miss the bus,” she said at an event.