What is ‘The Merge’? Everything you should know about Ethereum’s long-awaited upgrade

Updated on 23 June, 2022 9:15 AM
1 min read

Jump to:

    Introduction to 'The Merge'

    It’s 2022 and Ethereum is finally ready to hit the update. For the unknowns, Ethereum is a decentralized blockchain that supports smart contracts. It has a cryptocurrency called ether, which is the second-largest cryptocurrency in the world. To validate every transaction on the blockchain, Ethereum currently uses a process called ‘Proof of Work’.

    If you haven’t already, click here to understand What is Proof of Work?

    Proof of Work, a bitcoin native process, essentially means that to validate each transaction, miners have to solve some complex mathematical problem.

    The problem with proof of work is that it’s not scalable and it is not sustainable. Proof of work consumes a lot of energy and also leads to slow speed in transactions. Hence, the developers decided to shift to a better concept called ‘Proof of Stake’.

    Read about What is Proof of Stake? here, it will give you a comprehensive idea of what this event is all about.

    Now, coming back,

    Proof of Stake is a process to validate transactions where miners would stake their native crypto. It makes the network accessible to small miners, is more eco-friendly, and also makes transactions speedy.

    About ‘The Merge’

    The whole upgrading process of Ethereum to Ethereum 2.0 which would shift the validation process from ‘proof of work’ to ‘proof of stake’ is known as ‘The Merge’. It’s called ‘the merge’ because the current beacon change would merge with the Ethereum chain that we know of today without changing anything, hence giving Ethereum a new life. Mainnet will bring the ability to run smart contracts into the proof-of-stake system, plus the full history and the current state of Ethereum, to ensure that the transition is smooth for all ETH holders and users.

    Pros of ‘The Ethereum Merge’

    1. Firstly, the Ethereum upgrade would help developers to scale and speed up the transactions on the chain. This would result in bringing back projects which migrated to other layers 2 solutions such as Polygon.
    2. The upgrade would lower the gas fee and the energy consumption on the network by 98%.
    3. If the upgrade is successful, it would lead to the wider common adoption of the chain

    Cons of ‘The Ethereum Merge’

    1. As the upgrade would be new, the network would take time to adjust and hence would lead to congestion on the chain.
    2. A few features, such as the ability to withdraw staked ETH, will have to wait for a little longer after ‘The Merge’ is complete.

    For Current Investors

    The Ethereum website states that current ETH holders don’t need to do anything around the merge. They may get more involved in the upgrade through staking or helping to test the upgrades, but the holdings remain the same. It is speculated that the merge will lead to an increase in activity on the ethereum blockchain, leading to an increase in demand, hence the price of ETH. However, some experts believe that ETH's current market price already factor's in this event to a great extent, hence the price jump will not be very significant.


    Ethereum’s current $150 billion market cap would entirely depend on how smooth the upgrade is. It shall also include the thousands of businesses that run on the chain, with a million active users making the use of the chain and developers that are building around it. It is indeed one of the most remarkable events in the history of cryptocurrency and would be deemed to be highlighted and looked upon in the near future as well.

    Like this article? Spread the word

    Subscribe to our

    Receive timely updates on new posts & articles about crypto world.