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One cryptocurrency this month has accomplished an important milestone. I’m referring to Ethereum (-1.34%, ETH). The second-largest cryptocurrency in the world is completed. The Merge is a change in how the company’s blockchain transactions are validated.

The performance of Ethereum provides us with a buying opportunity. It has decreased by roughly 20% since this procedure. Two justifications exist for purchasing Ethereum in September. And here’s a third: Ethereum still has more in store. Let’s look more closely.

Using a proof of stake instead

An introduction to The Merge is first. This required changing the validation mechanism from proof-of-work to proof-of-stake. Proof of work uses intricate math to validate a transaction. Because of this, Ethereum utilized almost the same amount of energy per year as the Netherlands.

Proof of stake reduced energy consumption by over 99%. That’s because validation doesn’t need to consume as many computing resources anymore. Instead, the largest stakeholders are given the chance to confirm transactions. It is simpler to envision the world utilizing Ethereum in the long run because of its greener profile.

If there are enough transactions, the transition may potentially gradually decrease the amount of Ethereum currencies. Transaction costs are burned when proof of stake is used. They were given to miners with proof of work.

Validators are still rewarded with fresh money today. However, if there are a lot of transactions, the burned transaction fees can be greater than the value of the newly introduced coins. And a higher price is supported by a less supply.

These are the initial advantages brought forth by The Merge. The Merge, however, is yet another stage in Ethereum’s general update’s progression. What is coming up? Something that will solve Ethereum’s two main issues with sluggish transaction speeds and high transaction costs. I’m referring to sharding.

Transactional tempo

A database can be horizontally divided up using sharding. It speeds up transactions, lowers transaction costs, and lessens congestion on the primary network.

Sharding might lead to more decentralization as well. That’s because it makes it possible for additional people to join the network. The goal is to enable Ethereum support on devices like smartphones and computers. Decentralization is essential because it gives users more protection and control over their data. Ethereum intends to introduce sharding the next year

Author: Steven Sinclaire

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