Should it be your concern as an Ethereum investor?

According to the Ethereum developers, you don’t have to do anything with your funds or wallet to consider The Merge. Even if it doesn’t seem like a big difference to you as an Ethereum user, the Ethereum network will experience a higher load as more people will now transact on the updated blockchain network.

No story was lost in The Merge, Ethereum developers say. When Mainnet merged with the Beacon Chain, it also merged Ethereum’s entire transaction history. This means that the new network just seems like an upgrade of the old one. But it will be faster and more efficient. Any funds that were in your wallet before The Merge will still be available after The Merge. No action is required on your part to upgrade.

Why PoS is better?

Both systems validate crypto transactions while the network remains decentralized. In traditional finance, intermediaries play a role in validating a transaction. The PoW was designed to remove such intermediaries by using powerful computers that ran complex algorithms to verify transactions and earn crypto rewards in return. But the system, also known as bitcoin mining, has put a lot of strain on the environment. A lot of energy is required to perform and validate such transactions. Hence the Proof of Stake.

It’s an energy-efficient process, meaning no power-guzzling computers are needed to process transactions. Cryptos are deposited in a pool and the transaction is varied by a randomly selected validator. These validators explicitly invest capital in the form of ETH in a smart contract that serves as collateral. This can be used when the validator is behaving dishonestly or lazily. This ensures that the validator checks the validity of transactions.

According to Justin Drake, one of Ethereum’s key researchers leading the migration, the merger will dramatically increase Ethereum’s security. “An attacker needs 51% of the value of the blockchain [take control]. With Proof of Work, you need somewhere in the region of $5 billion, which you can use to buy enough computers and transformers, plug them all in, and then launch an attack. With Proof of Stake, we’re going to have about $20 billion in economic security today – and I think that number will increase dramatically.”