- The long-awaited Ethereum “merger” is planned for the third quarter of this year, but there is no set date for its launch.
- Bitwise’s Matt Hougan said that further delays cannot be ruled out, and the move to a proof-of-stake algorithm might not be bug-free.
- Ethereum developers are not sure when exactly the merger will take place because it is a technically challenging process, said Bitwise’s head of research.
The ethereum network is about to implement one of the most significant software updates in crypto this summer.
The blockchain platform, which currently has the
algorithm that powers bitcoin, will switch to proof-of-stake consensus after an event called “the merger”.
This update was named the most compelling story of the year in the digital asset industry by leading cryptocurrency fund Bitwise Asset Management.
“Merging” will reduce ethereum’s energy consumption, make native ether token more scarce and allow stakeholders to earn more income. But like anything else, there are risks associated with the event.
“This is a high-risk and highly complex upgrade to the core blockchain that already protects over $300 billion in assets,” Matt Hougan, chief investment officer at Bitwise, said in a webcast this week. “So there are significant risks.”
Expected to bring lower costs and faster transactions on the blockchain, the merger has been long-awaited and its launch has gone through a series of delays – possibly allowing competitors to grab market share.
Ethereum developer Tim Beiko said last week that the update wouldn’t happen in june as originally expected, but likely in the coming months.
Btiwise’s Hougan said even more delays cannot be ruled out.
“Complex software releases are often delayed, and this is a complex software release,” he said.
“So while most people expect this to happen in the next few months, there is the possibility of further delays,” he added. “It is also worth noting that
systems are more complex than proof-of-work systems.”
Hougan also noted that the process may not be flawless, even if it is well tested.
“Particularly when you go through a transition upgrade, it is clear that there is an opportunity or possibility for bugs or unintentional exploits to be introduced into the ethereum blockchain,” he said.
Despite the developers’ intentional focus, Hougan said he’s seen other blockchains stumble when it comes to major upgrades. So the risk of this happening with the Ethereum merger is not zero, he said.
Another risk is that the proof-of-stake consensus mechanism is not as battle-tested as the proof-of-work, which has proven to secure large blockchain networks over the past 12 years.
“Proof of work has been around for over twelve years. It periodically stores over a trillion dollars in assets and is a proven system.”
“Proof-of-stake is a newer system and therefore has more inherent risks, and at least its security guarantees can be discounted a bit,” he said, referring to the algorithm’s functionality being tested by several competitors. of Ethereum that have incorporated it into their blockchains, such as solana. .
Despite several delays in the merger in the past, many crypto enthusiasts are confident that the update will take place in the next few months, but even the developers don’t know exactly when that might happen.
“If you ask an ethereum developer when the merger is coming, the most likely answer you’ll get is ‘when it’s ready’ – which is the right approach… David Lawant, research director at Bitwise, said in the webcast, adding that blockchain is still going through a testing phase right now.
“Ethereum has a number of testnets that the merger is being implemented on. The latest tests were successful. And we think there is a possibility that the merger will happen sometime in the third quarter. Also a possibility.”
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