The Ethereum mainnet is expected to soon “merge” with the beacon chain proof-of-stake system, thus ending proof-of-work for the ETH blockchain.
Mainnet will bring the ability to run smart contracts into the proof-of-stake system, plus the full history and the current state of Ethereum, to ensure that the transition is smooth for all ETH holders and users.
Just recently, the Ethereum Foundation announced that the “merge” has been successfully conducted on the Kiln testnet. The event took place on 15 March, with Ethereum’s developers lauding the landmark occasion. With this, the beacon chain has merged with the Kiln testnet.
The Kiln testnet is the final public testnet before the transition to proof-of-stake, which should occur later this year. This is a major milestone for the Ethereum network as it prepares to go through with some of its biggest changes since its inception.
In fact, an official Ethereum Foundation post reads, “Application & tooling developers, node operators, infrastructure providers and stakers are strongly encouraged to test on Kiln to ensure a smooth transition on existing public testnets.”
What might change for ETH after the merge?
“The probability of ETH net deflationary consistently is quite high post the merge,” said Brian Krogsgard, Co-Founder, CMO of Flip during an appearance on a podcast. Furthermore, he went on to add,
“Bitcoiners are going to have to question themselves if they have less utility and mildly inflationary instead of deflationary regularly. ETH also has the potential to go five-figure asset post the merge.”
Curiously, he also claimed that the merge will likely be deployed in a bear market. What this means is that the market may not take to the merge immediately.
Market watch: Bear market or Super-cycle?
Looking at the current chart, the market may be gearing up for some potentially difficult weeks ahead, similar to that of 2018 and 2019. ETH back then lost 90-95%, EOS lost 99%, and BTC was down 85-90%.
In case the future mimics the bear cycle of 2018, we might just see peak to troughs from all-time highs like 85% to the bare minimum.
However, this is not the only route the market can take. In fact, with exchange outflows hitting a new high recently and other metrics leaning bullish, it’s more likely that the direction ETH will take will be north.
We may also be looking at a potential super-cycle in the future. Rather than going down, maybe the chart goes sideways. With the war, COVID-19 easing, and the price coming back up, these factors might just lead to the next boom.
Finally, Bitcoin mining is now profitable, and so is participating in the ecosystem. In fact, according to the exec,
“The last time Bitcoin miners had to shut down because Bitcoin mining was more expensive than the Bitcoin they got a reward, that is not a super-cycle. You go through a supposedly bear market and all the activity remains profitable in the market and retains productivity, that is kinda a super-cycle.”