Ethereum May See Large Institutional Funds After Merge

According to a trusted and renowned cryptocurrency expert, there is a likelihood that Ethereum institutional interest (ETH) may increase if the crypto giant adopts the PoS (Proof of Stake), its new system for validating crypto transactions. While the crypto analyst with over 400 000 followers on YouTube explained why he is still holding the coin, he suggested that Ethereum is expected to produce up to 15% interest for its yearly stakers.

This InvestAnswers anonymous host mentioned that ETH’s return might be an attractive substitute for bonds for wealthy investors.

This crypto expert also stated that the other reason behind his holding of the coin includes its superiority in the decentralized finances (DeFi), the environmental friendliness of the PoS consensus mechanism it is adopting as well as its minimized regulatory risk, among other reasons.

What is The Merge And What Does It Entail?

The merge is used to refer to the Ethereum networks’ move from its previous Proof-of-Work consensus mechanism to a new system called the Proof-of-Stake. The primary reason behind this move is the large amount of power consumed by the Proof of Work mechanism.

This shift is called a merge because Ethereum already developed a PoS mechanism named the Beacon chain in 2020, but it hasn’t begun using it to run transactions. Currently, it serves as a staging medium for preparing systems operating on the Ethereum network for the PoS upgrade. Before Ethereum can fully transit to the PoS, it has to combine the Beacon chain it created with the Ethereum Proof of Work Mainnet. It refers to the Beacon Chain as the Consensus layer and the PoW mainnet as the Execution layer.

When Is The Merge Scheduled To Take Place?

There is no particular date selected for the merge to happen. However, it is predicted to occur around September 15, 2022. There is no specific date for the launching because Ethereum accommodates a difficulty figure representing the number of work miners have to put in before they add to the network.

So, the merge will happen when the aggregated difficulty figure of the total blocks mined on the Ethereum network attains a specific number, referred to as the TTD (Total Terminal Difficulty). Ethereum expects to reach the TTD point by 14th or 15th of Sept. 

The most significant difference between the PoW and the PoS can be found in how they determine who is authorized to document the subsequent block of transactions on the network. Ethereum’s shift may also barely increase the transaction rate. Also, PoS is expected to reduce Ethereum’s energy consumption by 99.95%. However, this doesn’t mean Ethereum’s fee will decrease after the merge. 

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