September 15, 2022, marks a watershed event in blockchain history. After eight years of study, debate and development, Ethereum seamlessly migrated to the Proof of Stake (PoS) model. The Ethereum blockchain is now energy-efficient and is no longer a threat to the earth. Ethereum’s energy consumption is projected to decrease by a whopping 99.95%. Will Ethereum price increase now that the merge is over? Will there be a reduction in Ethereum gas fees? Will there be further developments on the Ethereum blockchain?
Will The Ethereum Price Increase?
Deflationary pressure will be on Ethereum as block rewards will reduce over time. Two mechanisms will cause this:
One, block rewards issued to stakers daily have reduced to about 1600 Ethereum under the PoS model. This is in contrast with the PoW model that issued out about 13,000 Ethereum to validators daily.
Two, the EIP-1559 upgrade on August 5, 2021, also introduced the burning of ETH paid to the network as transaction fees. These developments will impact the price of Ethereum gradually.
Will The Merge Speed Up Ethereum Transactions?
The answer is NO. The speed of processing transactions remains the same. What changed is that the creation of blocks is now faster on the Ethereum blockchain. On the current Proof of Stake model, blocks on the Ethereum blockchain are created 10% faster than on the Proof of Work model.
Will There Be Reduction In gas prices?
The Merge did not cause a reduction in the cost of gas fees on the Ethereum blockchain. “The Merge is a change of consensus mechanism, not an expansion of network capacity, and will not result in lower gas fees.” – Ethereum Foundation.
The implementation of sharding on the Ethereum blockchain will cause gas fees to reduce and validators will be rewarded for operating nodes and maintaining the blockchain.
Surge: The Next Development On the Ethereum Blockchain
The merge is the first of five upgrades to be implemented on the Ethereum blockchain. In their particular order: The Merge, Surge, Verge, Purge and Splurge. Having completed the Merge and transitioned to the PoS system, the next in line is the Surge.
What is the Surge?
The Surge upgrade is set to happen in 2023. The Surge is the addition of Ethereum sharding which will lower gas fees and make it easier for users to run nodes that will help secure the Ethereum blockchain on personal devices such as PCs and mobile devices. Sharding will help scale the blockchain’s ability to store and access data and will enable the Ethereum blockchain to process 100,000 transactions in a second.Share & like