Ethereum Merge will be the biggest crypto event since the first Bitcoin was mined – Ran Neuner and Steven Sidley
https://www.youtube.com/watch?v=/PTvseEZacjI
On September 15, Ethereum is expected to complete the merger from a proof-of-work to a proof-of-stake consensus mechanism, which could have a major impact on the cryptocurrency.
Ran Neuner, founder and host of Crypto Banter, said that the upcoming merger, also known as ‘The Merge’, will be the biggest event in crypto history since the first Bitcoin was mined.
“This ETH merger is the most important event that has happened in [crypto] since the first Satoshi block was mined, Neuner said. “It could be the biggest catalyst for crypto, but it could also be the biggest disaster for crypto.”
The merger is expected to change ETH’s consensus mechanism from an energy-intensive proof-of-work protocol to an ESG-friendly proof-of-stake dynamic. If the merger takes place on September 15, as expected, participants will be rewarded with 5 to 15 percent returns.
“The whole reason why Munger and Buffett and all these guys are just raging all over the crypto world is [cryptos] not produce any dividends,” said Steven Sidley, a professor at the University of Johannesburg and head of the university’s Blockchain and CryptoVerse Research Group. “In fact, post-merger Ethereum is making a return, so that ticks the box.”
Neuner and Sidley spoke with Michelle Makori, editor-in-chief and lead anchor of Kitco News, who moderated the panel discussion.
Ethereum Merger
Cryptocurrencies are validated using either a proof-of-work or proof-of-stake consensus algorithm. A proof-of-work mechanism requires miners to solve a complex mathematical problem, which confirms transactions and rewards successful miners with more coins. A proof-of-stake, on the other hand, allows coin holders to “stake” their coins, in return for validation privileges and potential ROI rewards.
“Proof-of-work effectively means you need expensive mining machines to validate transactions,” Neuner said. “These miners have to solve a mathematical problem, which is very complex and uses a lot of power… Proof-of-stake is a much more energy-efficient way of validating transactions that doesn’t require all this heavy machinery.”
The Ethereum merger, on September 15, is expected to take ETH from proof-of-work to proof-of-stake. However, Sidley cautioned that the transition to proof-of-stake is only the first part of the overall merger process.
“Gas taxes are unlikely to go down and transaction throughput is not going to go down,” said Sidley, who is also a best-selling author and director at Bridge Capital Future Advisory. “That happens in 2023, with the next stages of The Merge, and there will be a jump in price … but it will be a much bigger jump when they go to what is called danksharding, which is the next stage of The Merge, which pushes up the TPS [transactions per second] and pushes gas prices down. That’s when I expect there will be real exponential growth.”
ETH is going deflationary
After The Merge, the amount of Ethereum burned will exceed the amount of ETH created, said Neuner, who is also CEO and co-founder of Onchain Capital.
“We have to look at it on the day of The Merge, because after that, what happens is the amount of Ethereum that is released is less than the amount of Ethereum that is burned, which means that the number will eventually tend to zero,” he explained. “So that’s why this is so powerful, because you’re cutting the supply of Ethereum while making the network much faster and much easier to deploy.”
Neuner said this would make Ethereum deflationary, which in turn could make ETH more valuable.
“So, now you have the top two assets, Bitcoin, which is mildly inflationary, and Ethereum, which is ESG-friendly, generates between 5 and 15 percent returns, and is actually deflationary,” he said. “And when you put all that together as an investor… [ETH] might actually be a better investment than Bitcoin.”
To find out about Neuner and Sidley’s price forecast for Ethereum and Bitcoin after The Merge, watch the video above.
Follow Michelle Makori on Twitter: @MichelleMakori
Follow Kitco News on Twitter: @KitcoNewsNOW
Disclaimer: The views expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is for informational purposes only. It is not an invitation to exchange goods, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept responsibility for any loss and/or damage arising from the use of this publication.
