The Merge is the most anticipated and discussed update of the network of the second largest cryptocurrency by market cap, Ethereum.

The Merge update consists of basically merging the main Ethereum network based on the POW consensus algorithm with the previously launched Beacon Chain network, which runs on the POS consensus algorithm. After the successful completion of these two networks merging, the Ethereum blockchain will completely switch to the POS consensus algorithm. Ethereum mining will be replaced with staking.

According to the developers, the transition to the POS algorithm will allow the Ethereum network to become more secure, thanks to an increase in the number of participants in the consensus. This will happen because becoming a network validator is much easier than becoming a miner. You no longer need to purchase complex computing equipment and spend a lot of electricity. It is enough to put your ETH in staking and get rewarded.

Reducing the power consumption for securing the Ethereum network by more than 99% makes a big difference when it comes to the environment. The Ethereum blockchain will disappear from the agenda of environmentalists demanding a ban on mining due to carbon emissions.

The networks merge and the rejection of POW consensus algorithm will reduce the annual emission of the ETH cryptocurrency. Together with the burning algorithm, this will reduce inflation to the level of 0.5-2%. In the long run, this can positively affect the ETH value.

We shouldn’t expect lowering the fees and increasing the speed of transactions with The Merge update, though.

P.S. The content of this post should not be construed as investment advice. We ask you to do your own research. This text is not a guide to action.

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