Jack Niewold, founder of the Crypto Pragmatist newsletter and crypto watchdog, took to Twitter to share his thoughts on the potential risks and opportunities that the Ethereum merge brings to the global Blockchain community.
Could Ethereum merge cause civil war?
According to Niewold’s thread, there are three groups of risks associated with the September 2022 merge.
- Technological risks
- With logistics risk
- Fork risks
https://twitter.com/JackNiewold/status/1555660494215647232
Technical risks are mostly related to the unexpected technical consequences of migrating from PoS to PoW. That is, the entire network may pause. This will allow engineers to reboot Ethereum (ETH). Niewold underlines that this will not be the “end of the world”.
“Logistics” risks include the possibility of the Ethereum merge being delayed once again. Like every major upgrade in Web3, the history of the merge has changed several times.
At the same time, the risks associated with the possible fork are the most dangerous for network participants. This will result in two parallel Blockchains. The former will work on PoS consensus, while the latter will remain active over PoW. Therefore, centralized stablecoins like USDT or USDC will have two “equal” versions with a “civil war in crypto”. Niewold says such an end is “logistically unlikely” as the PoW version of Ethereum (ETH) will lack media coverage, developer activity, and fiat gateways. We have quoted Vitalik Buterin’s statements on this subject on Kriptokoin.com.
Should we expect chaos?
According to estimates, the big names will not be interested in developing the “outdated” PoW Ethereum. Therefore, the community should not exaggerate the “fork risks”. However, this uncertainty is causing large pre-merge sales. Therefore, investors and traders should be cautious in mid-September 2022. Meanwhile, the merge testnet activation is expected to occur on September 19, 2022, two weeks after Bellatrix’s late testnet update.
How will the Ethereum merge affect miners?
Ethereum miners know that completing the merge will terminate ETH mining. Also, all transactions performed on the ETH network will be received by the validators. Also, based on the status quo of PoS Blockchain, these validators will earn rewards for every effort they make.
ETH miners have the option to switch to Bitcoin mining, but there is also a problem with the idea. This has to do with the mining systems of both cryptos. Ethereum miners use GPUs to perform mining operations, while Bitcoin miners use ASIC. This is where the compatibility issue arises. As a result of the merge, ETH miners will have only one option: to get some of their previous amount before the merge. Also, they will no longer have their GPUs as they will sell it.
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