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Vitalik Buterin recently spoke at the ETH Shanghai 3.0 Developer Summit, where he addressed the elephant in the room. The most highly anticipated event in Ethereum history that is called “The Merge”. It is the transition of Ethereum from Proof of Work to Proof of Stake. A switch to Proof of Stake has been under development for close to 7 years.
The environmental implications of transitioning to proof of stake should not be understated, as Ethereum is currently the second most mined cryptocurrency on the planet. By removing Ethereum (and all the blockchains that rely on it) off of proof of work mining, there will be a huge reduction in CO2, and associated greenhouse gases.
Also, significant is the improvement in scalability that will be offered, transactions will no longer be constrained by an archaic system, proof of staking is both environmentally friendly and it offers unlimited scaling opportunity, both with number of transactions per second, but also with the speed of execution of smart contracts.
The steps to undertake this will begin on June 8th when a test will be undertaken on the Ethereum Test Network, a test described as larger than any previous test. This is a significant milestone for Vitalik Buterin who is considered in the cryptocurrency community to be the most honest, hardworking, and non-financially motivated entrepreneur in all of crypto.
When reviewed in a historical industry lens, Vitalik Buterin is the reason cryptocurrency experienced multiple bull cycles, with one bull cycle matching the introduction of Ethereum and smart contracts, and the largest bull cycle of 2017 matching the rapid proliferation of ICOs (Initial Coin Offerings) that were conducted on the Ethereum blockchain.
It is the announcement of the Ethereum Test Network launch on June 8th that may lead to a small market rally. But more importantly, Vitalik Buterin also announced that this anticipated Merge will happen in the summer. Afterwards he clarified possibly August, unless there are unanticipated problems, then maybe September or maybe October. Vitalik Buterin seems to be giving himself extra time in case of unpredictable and unexpected failure.
Regardless of the month, it was clear beyond a doubt that one of the most highly anticipated events in Ethereum history will occur sometime in 2022.
Investors should consider that while Ethereum may have recently bounced off its all-time recent highs of $4800 in November 2021, it is also far from its lows of $140 in 2020.
While there are some solid competing blockchains such as Solana, Ethereum is still the market leader. There is also very little reason to believe that Ethereum will fail in their stated objectives.
This is why today I am buying Ethereum (ETH) at $1942 a token. This is not a trade without risk, while Ethereum is one of the most trusted projects in the ecosystem, digital assets have been taking wild swings in both directions, with the bulk of short term market actions leading consistently towards the negative territory.
Nonetheless, if there is one principal that I understand, is regardless of the technical success of the Merger, the marketplace will use the announcement of the Merger to rally the market the closer we get to the anticipated launch day.
This rally could result in there being a good entry point to make a profit even before Proof of Stake is live.
Another important announcement, was Vitalik Buterin discussing the potential of Ethereum applications outside of finance, with a special emphasis on DAO governance.