What’s the Ethereum Merge?

You’re likely to hear a lot of chatter today about the Ethereum Merge. It’s a major step for the Ethereum blockchain that has been years in the making. Many people have already described what this means for Ethereum and the future of crypto. That’s why I’ve curated some of my favorite resources on The Merge for your understanding. And I’ll close it out with a few thoughts of my own.

Full Value Dan provides the simplest description of The Merge in the following video:

If you only have a couple of minutes to read about The Merge, then here’s a solid Twitter thread by my friend Alex Valaitis – giving a high-level overview of what The Merge is, its pros and cons, as well as how it fits into the long-term plans of Ethereum:

Matt Levine looks at the implications of The Merge in the greater financial sector in this Bloomberg piece.

And finally, Bankless gives perspective on how to make money from The Merge through the staking features in his Bloomberg piece titled How to Win the Ethereum Fork.

My Take On The Merge

The clearest benefit of The Merge is the 99%+ energy savings of switching from Proof-of-Work to Proof-of-Stake at the consensus layer of the blockchain. Basically, this destroys one of the major arguments against cryptocurrency “not being green.”

When I wrote The NFT Handbook in early 2021, many people were disputing NFTs for their energy consumption. I purposely didn’t cover this topic much, as I knew some of the brightest minds in the world work in the crypto industry and they’d surely figure out a solution.

I’m still amazed by the progress that is being made in this decentralized community of developers. Not many of us can fathom the important moment in technology history we’re experiencing. But we’re literally witnessing the creation of the most important virtual computer.

Lastly, there’s no telling how The Merge will impact the price of Ethereum in the short term. At the moment, Ethereum’s market cap is about half that of Bitcoin. If everything goes as planned, though, I don’t believe we’re too far away from ETH surpassing BTC in market cap.

What will happen when ETH surpasses BTC in total value?

This will replace the BTC-led argument of crypto being a store-of-value hedge against the stock market with an ETH-led argument of crypto providing true economic utility. When the leading cryptocurrency (ETH) is the most powerful decentralized computer on the planet, I think we will see a large increase in institutional adoption of the blockchain.