The crypto department of the leading card payment system Visa has announced its opinion on the transition of this altcoin system to PoS.
Ethereum Merge does not immediately advance decentralization
Mert Özbay and Mustafa Bedawala from Visa crypto department explain what we should not expect from Ethereum (ETH) Merge activation and why this upgrade is still very important for Web3. Visa has released a report on what to expect in a new Ethereum era regarding the mainnet activation of The Merge mechanism.
Above all, the authors underlined that this event really changed the rules of the game in terms of Ethereum’s sustainability, environmental friendliness and resource efficiency. Regarding these aspects, this is the most impressive transition so far in the history of technology:
“The transition from PoW to PoS is estimated to reduce Ethereum’s energy consumption by 99.95%. It is the first demonstration of a system of this size that only reduces its carbon footprint through innovation and redesign.”
At @Visa, we are excited to share our latest research piece, where we delve into the specifics of "The Merge", its potential ramifications for the blockchain trilemma, and the upcoming blockchain upgrades that we are closely monitoring. pic.twitter.com/kL3IZepD4R
— Mustafa (@digitalmustafa) January 18, 2023
Meanwhile, when it comes to decentralization and security, enabling The Merge may seem like a double-edged sword for Ethereum (ETH) in the long run. Although proof-of-stake consensus has a lower barrier to entry (thanks to staking providers), it doesn’t immediately result in better decentralization.
Since the 32 ETH threshold for a validation node is too high for Ethereum (ETH) enthusiasts, the whale-style dominance of the biggest miners could be replaced by the oligarchy of staking assets. Therefore, staking pools can gain a lot of control over the progress of Ethereum (ETH) thanks to the large amount of Ether staked by their clients.
The most important developments for this altcoin are yet to come
The same observations apply to the scaling prospects of the largest smart contracts platform. The transition to proof-of-stake (PoS) consensus does not result in a production spike for Ethereum (ETH). This can only be achieved through sharding or Tier 2 solutions.
Therefore, Visa cryptocurrency experts will closely monitor the next developments in the Ethereum 2.0 roadmap to decide whether it is ready to play an important role in the global cross-border payment system. In the statement made, it was said:
“The development of scalability and security features in Ethereum 2.0 over the next few years will be critical in shaping the network’s ability to be used for broader payment use cases.”
As we mentioned earlier as Kriptokoin.com, Ethereum (ETH) Merge was activated in September 2022. The network was the first to switch from PoW to PoS and completely replace staking and mining.
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