Key points to remember
- Vitalik Buterin said that Ethereum’s upcoming Proof-of-Stake update is “not taken into account” from a narrative perspective in an interview with Bankless.
- He added that the broader Ethereum ecosystem has seen notable developments in the race to scale the network.
- While he didn’t comment on specific dates, he also said the merger “actually has to happen on a schedule.”
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The Ethereum creator added that the merger must “go on a schedule” and discussed scalability developments in the ecosystem in a Bankless interview.
Buterin discusses merger
The impact of the upcoming Ethereum “merger” on proof-of-stake will only become apparent once the upgrade ships, Vitalik Buterin suggested.
Speaking in an interview with Without bank co-host David Hoffman at the Ethereum Community Conference last week, Buterin said the long-awaited network update could change sentiment in the crypto space. “Once the merger is done, morale will skyrocket,” he said, referring to these building projects within the Ethereum ecosystem.
He also said that he thinks the update is “not taken into account” because it hasn’t launched yet, clarifying that he was mainly talking about trust in Ethereum rather than the price of Ethereum. ETH itself. “Basically, I expect the merger to be sort of priceless, by which I mean not just like market terms, but even like psychological and narrative terms,” he said. .
Many Ethereum enthusiasts have predicted that the merger could act as a potential catalyst for ETH’s price surge, but the market-wide fall in crypto prices means the asset is currently far from its peaks. Despite this month’s rally, ETH is worth around $1,620 today, still 66.8% off its peak.
While market interest in ETH is down from its late 2021 highs, the merger is expected to be the biggest protocol update in Ethereum’s history. This is to “merge” the Ethereum proof-of-work backbone with the proof-of-stake beacon chain, otherwise known as the execution layer and the consensus layer. Once the merger is shipped, Ethereum will use proof-of-stake and network validators to build consensus rather than relying on proof-of-work and miners. This should bring several changes, such as greater energy efficiency and reduced ETH issuance, as the protocol will no longer need to pay miners.
Buterin alluded to the point of energy efficiency in his Without bank interview, saying that people often misunderstand Ethereum’s power consumption and how the protocol will change after the merger. “In narrative terms, I think the price won’t be priced in until that happens,” he said. “Even today, many people act as if this environmental problem is a fatal flaw.” Ethereum has come under intense scrutiny for its environmental impact in 2021, mainly thanks to China’s ban on crypto mining and the consumer NFT boom.
Scalability and market cycles
During the interview, Buterin also reflected on the current state of the crypto ecosystem as the space experiences a months-long downturn in the hangover from last year’s euphoric bull cycle. He argued that there are benefits and costs to the cyclical nature of crypto. “[Market booms] attract a lot of people and excite them, which is fine, but they give people too much of an idea of what space holds promise for, ”he said, before subtly leaning on bad actors and politicians . “They attract the attention of disreputable characters and governments who decide because it exists, it’s their business.”
Much like he did during his presentation at EthCC, Buterin also commented on other big tech developments happening in the broader Ethereum ecosystem. Speaking of Layer 2 scaling solutions, he admitted that development has lagged behind market demand. “Elements of scalability haven’t come fast enough for this cycle, but for the next cycle it will,” he said, before noting that there have been some promising developments with rollups. and zkEVM solutions in the market.
He also acknowledged the need for Ethereum to “change things dramatically,” pointing to merging and sharding as key protocol changes coming. And while he didn’t comment on the merger’s planned launch date, he said it couldn’t be postponed indefinitely (the update suffered years of delays and setbacks). “The merger actually has to happen on a schedule,” he admitted.
Prior to the launch of the mainnet, the merge will have a final scan on the Goerli testnet. According to a member of the Ethereum Foundation Tim Beikothis happens between August 6th and 12th. The main event is tentatively scheduled for mid-September.
Disclosure: At the time of writing this article, the author of this article owned ETH and several other cryptocurrencies.