Ethereum Merge FOMO
Evening
As of now Ethereum 2.0 is the talk of the town, as the proposed Merge date continues to draw near. We have already seen Ethereum price pumping hard lately, due to the Merge FOMO.
Is Merge such a big deal?
Merge will change the way Ethereum network operates i.e. shifting from legacy proof of work(PoW) to energy efficient proof of stake(PoS) consensus mechanism. It is estimated that The Merge will reduce Ethereum network power consumption by ~99.95%.
This certainly looks good on paper especially from the environmental point of view. But Merge will do very little to solve the network inherent scaling and gas fees issue, at least not in the short term. Post merge we are gonna have the same Ethereum network with same old congestions and gas fees issues.
Merge itself won't do anything from network expansion point of view but it will certainly serve as a foundation for many upcoming network upgrades that aims to solve the scaling problems e.g. Sharding.
So, all this fomo surrounding the Merge is actually unrealistic as it is based on many misconceptions. So much is banking on the successful Ethereum merge, but I feel it is certainly unfair to judge the Ethereum network based upon the success of the upcoming Merge.
Whether we have a successful merge or not, it is still gonna be the same Ethereum network that we all fell in love with. We are gonna have Merge eventually, no doubt about that. And even if we do have a successful merge, it will not be a game changer at least not in a short term. Average Ethereum users is not gonna feel any difference post merge.
Chain Split and Free Tokens???
(Source) Apart from the misconceptions, the possibility of a chain split and resulting free tokens is also fueling the Merge FOMO. But operating the old chain after the fork, is easier said than done. First of all, it would be difficult to convince a significant number of miners to keep dedicating their hash power to the old network. We are already seeing increase in Ethereum Classic hash power, because it is the best alternate of Ethereum miners with established mining infrastructure.
And even if the fork happens the old chain Ethereum and other coins on it may not be of any value immediately with no centralized exchange supporting the old chain. There might be some smaller exchanges who will start supporting the old chain but their volumes will not be enough to support the excessive dumping. All in all, the old chain(if the fork happens) will require time to establish the credibility. Hence no cash grab in short term.
For now Merge FOMO is dictating the Ethereum price. Once the Merge happens(I hope in time), things are gonna settle down. And once again market force will be in full charge of the Ethereum price.
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