What is The Ethereum Merge? What Institutions and Investors Should Expect

Introduction

The adoption of Cryptocurrency is on the rise.

It is because institutional investors have been showing interest.

The leading institutions have decided to step into the Defi and the Web3 ecosystem.

This further impacts the Crypto Ecosystem positively.

Reports say that these institutions invested $9.3b in the Crypto market in 2021.

It marks a complete technological shift as the Crypto market increased to around 36%.

Now, one of the major reasons that triggered the change is attributed to a shift in technology called Merge.

Ethereum, the second largest Cryptocurrency, undertook a major shift from the Proof of Work to the Proof of Stake.

Now investors and institutions have their own expectations. Let’s seep deep into the study to have a better understanding.

What Is Ethereum Merge?

Ethereum, the world’s second-largest Cryptocurrency, shifted from energy-intensive technology offering sustainability systems to play.

They are calling it “Merge.”

The community built a new engine and a hardened hull.

They shifted from the Proof work system to proof-of-stake.

Proof of work involves a wide network of computers.

Under the system, if investors are to mine crypto, they must solve puzzles to mine crypto.

The level of the puzzles increases with mining.

This complex and energy-intensive technology was used to add new blocks to the system.

The Proof of Stake mechanism is an alternative technology that consumes less energy and computing power.

According to findings, POS consumes one-tenth of the energy to mine Ethereum.

Here one needs not to devote less energy and fuel consumption to run the illustrious computer systems.

What Institutions And Investors Should Expect

With a major technological shift, Ethereum has attained a paradigm shift, at least in terms of adoption-friendly technology.

They attained an advantage against Bitcoin, their rival and the largest Cryptocurrency in terms of market value.

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Now this change will bring in positive into the business ecosystem.

The institutions and the investors now have different expectations of the change. The section focuses mainly on the changes. 

1. Reduced Carbon Footprint

As discussed above, POS technology consumes a 99.5% decrease in energy consumption.

Now, the reduction of Carbon foot printing has a significant impact on institutions.

Our world is grappling with a carbon footprint, and its rapid increase in power negatively affects the environment.

You might have heard about the Paris 2015 environment summit, where it was found out the stakeholder had constructive planning, including the Net Zero programs, to stop the rise of the sea water level.

Now, with the Proof of stake, the stakeholders can mine Cryptocurrency with lesser power consumption, which syncs with the Net Zero targets of individual nations.

Hence the step provokes to be helpful for institutions, government, and the environment.

With this major technological high long jump, the companies are able to obtain their own sustainability goals and objectives.

2. Improved Security

Economic and trading democratization has always been the need of the hour.

The business entities investing heavily in Cryptocurrency needs are all driven by energy security and sustainable development.

They are always looking for alternative energy to increase their business opportunities.

But the traditional system economy, centralized in nature, stopped them from this.

With Cryptocurrency, they were able to get the technological shift.

With Proof of stake, the use of Blockchain became more common.

We all know that the Blockchain is an advanced data maintenance system storing data in a decentralized network.

Once the information is entered, it is entered forever. It can’t be manipulated.

Another reason for the improved technology is that the cost of attacking networks has dramatically increased.

Presently more than 45000 Ethereum have been staked so far.

Even 51% of the attacks would cost over $11B.

With improved security, more new investors are expected to join the system and gain growth in this ecosystem.

Closing The Discussion

The Ethereum merger has more for the investors and the institutions.

Now with the merger, cross-team economic collaborations have increased. It is good for increasing business opportunities.

This produces an ecosystem for business growth and stability.

The induction of POS has enabled client diversity and interoperability. They are important steps toward the growth of Cryptocurrency.

These are the advantages the institutions and investors are going to get with the help of the Merge.

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