Today, not only the crypto world but even the financial and tech worlds are focusing on one big thing, yes, the Ethereum merger.
The news just arrived shows that Ethereum has completed the long-awaited merger at block height 15537393 (around 14:42 on September 15, Beijing time). Previously, the vernacular blockchain has done a lot of and detailed science on the merger of Ethereum: the merger is imminent, you must know about the theme Layer 2 of the second half of the Ethereum, but in fact, the merger is a “hard-core” event. There is a lot of information, but everyone still said that there are still many questions, and they are deeply concerned about the progress after the merger of Ethereum. On the occasion of the merger of Ethereum, this article will pay more attention to you, such as deflation, centralization, and risk issues. Waiting for an in-depth analysis one by one…
Can Ethereum “speed up and reduce fees” after the merger?
If not, why go to the trouble of merging?
Not at the moment.
To put it simply, this upgrade of Ethereum is mainly the merger of the “execution layer and the consensus layer”. To put it bluntly, the biggest change is to switch from POW to POS, reducing the cost of energy consumption, verification and block generation to a low and controllable position. The “low speed and high fee” problem that has been plaguing the Ethereum ecosystem has not yet been resolved. It can only be said that we eat one bite at a time. The merger can be said to be a stepping stone for the large-scale expansion of Ethereum. With this foundation, multiple technical teams behind the Ethereum community can free up their hands to focus on Layer 2 and sharding on the roadmap. It is known that issues such as the Rollup cost of Layer 2 will soon be optimized. In the end, it will be a long process for the ETH2.0 (high-speed, low-cost) network to fully land, and the roadmap may be adjusted at any time due to new developments.
After the merger of Ethereum, more than 10 million ETHs will be unlocked and smashed?
No, even if unlocked, you can’t sell in bulk.
After the merger of Ethereum, the ETH of the POS pledged part is not unlocked immediately, and the real opening and unlocking time is expected to be in 2023. In addition, many people worry that the unlocking of a large amount of ETH will lead to a large number of selling and smashing. This does not exist in theory , because the POS pledge withdrawal will not be available immediately. Queued for unlocking, so there is no large amount of unlocked ETH in the market all at once.
After the merger of Ethereum, where did the computing power go?
According to the observation of the vernacular blockchain, there are many groups of Ethereum block producers. They mainly used graphics cards and ASIC devices to “mine blocks”. When POW turns to POS, the options in front of them are as follows:
1. Selling and reclaiming the residual value of equipment==” Participate in other algorithm POW projects mainly based on Bitcoin
(Reference article: The merger of Ethereum will strip off the 100 billion mining market, so what are the POW projects that benefit?)
2. Do not sell equipment = =” Continue to participate in the production of other POW projects with the same algorithm
3. No longer participate in POW and switch to POS pledge, or both at the same time
. Of course, the vernacular blockchain believes that most Ethereum mining farm resources (including but not limited to: cheap electricity , venues, computer room facilities, etc.) It may be possible to maximize the benefits by quickly listing Bitcoin equipment after delisting Ethereum block production equipment, so we have also seen an increase in Bitcoin computing power.
In addition, some people mentioned the “unemployment” problem of Ethereum block producers. From the perspective of Ethereum’s withdrawal from the POW mechanism, these “jobs” do not need to be done, and they are indeed “unemployed”, but most early participants have already It’s back to the original, whether to participate in the new POW or POS, or even prepare for the newer zero-knowledge proof calculation, is free, and a small number of losers have to face discounts and sell graphics cards and other equipment to reduce losses.
After Ethereum switched to POS, a “serious” centralization problem was exposed?
In fact, the problem of node centralization is not that serious. Many media or KOLs amplify the problem intentionally or unintentionally, causing panic among many people. They mainly pointed out two major problems: too many POS nodes are controlled by pledge service providers, and the custodian share of pledge node services is too large (AWS, etc.).
Let’s analyze them one by one. First of all, the problem of mining tyrants has long been a commonplace, and there is no need to repeat it. If this is a huge problem, almost only a few major mining pools have been sent to the guillotine. Furthermore, the share problem of POS pledge service is solvable, while the rules of POW are almost unsolvable. One is the decentralized pledge service plan, and the other is the pledge service provider’s anti-censorship commitment to the community (if it does not comply, users will transfer is).
Another problem, similar to the problem of IDC service providers, is much simpler. The deployment of Ethereum 2.0 verification nodes only requires stable Internet infrastructure, and the threshold is very low. The main reason for deploying to large service providers such as AWS is service Quality issues, even if AWS cannot continue to host due to policy issues, it does not mean that the nodes are completely destroyed. You must know that AWS nodes are all over the world, and you only need to migrate nodes in different regions.
In addition, it is impossible to reach a consensus on the policies and laws of more than 100 countries in the world. For example, the IDC service in some countries such as the Netherlands is very loose, and even allows the existence of websites with infringing content, so this has never been a problem. If you are worried about AWS doing evil and unplugging network cables in a large area, this problem is also very simple. It is now 2022. AWS is also a distributed network service deployed. Service outages for range customers are rarely, if not impossible, far more reliable than infrastructure located in remote areas of POW.
In general, the word “serious” is inappropriate. PoW and Ethereum’s POS consensus mechanism is more decentralized. It can only be said that each has its own merits. There is no need to make a fuss. In “Continuous Improvement”.To put it simply, for example, staking service providers with large shares such as Coinbase and Lido can directly use the ssv solution to provide users with decentralized staking services to solve these problems.
Ethereum upgrade is complex, difficult, and may have serious technical risks?
It is indeed very complicated and difficult, but no major risks have been found so far.
At one time, some mainstream media overseas (in the field of encryption, the media outside the industry) were also very concerned about the merger of Ethereum. Of course, for major upgrades, in a cautious attitude, it is widely believed that the upgrade of Ethereum is difficult and complicated. It is easy to encounter technical problems, and there may be loopholes after merging to POS, and there is a possibility of failure. Some people also think that the POS mechanism has not been tested and is not necessarily as stable as POW.
Regarding this point, as a cryptographic participant in the industry, it should be clear that the strength of several technical teams behind Ethereum and the rigor of previous upgrades are all top-notch in the industry. After several rounds of test network testing, the tests were basically smooth and no unsolvable problems were found. , the merger takes a long time from project establishment to technical research to test implementation, and preparations are sufficient. From the affirmative remarks of various ecological projects that support and participate in the development of Ethereum, the industry is still relatively confident in the Ethereum POS consensus mechanism. of. In fact, the beacon chain, as the main network of the Ethereum POS chain, has been running stably for a long time, and there is no problem. After the merger is completed, the POS link should be able to continue to operate stably.
After the merger, when will deflation officially start? When does the effect appear?
Deflation does not have a time point, it is more of a state.
When the number of destructions per unit time is greater than the average number of additional issuances, it can be said that Ethereum is deflation during this period. Recently, Yearn core developer banteg said on Twitter that Ethereum’s “Base Fee” of 15.43 Gwei is the threshold for the ETH supply to become deflationary after the merger. Simply put, when Ethereum reaches this threshold, the ETH destroyed through EIP1559 will exceed the number of additional POS issuances, reaching a state of deflation. Of course, under the influence of ecological activity, the gas fee of Ethereum has been fluctuating, and the POS issuance rate will also fluctuate depending on the proportion of pledged ETH. Therefore, Ethereum will not be deflated all the time under normal circumstances, but a large Production cuts are a foregone conclusion.
Referring to the experience of Bitcoin halving, the impact on market supply and demand was not large at the beginning of the halving. This trend began to gradually accumulate and then became strong. Therefore, the large production reduction or deflation of Ethereum may not be obvious from the beginning. The effect is achieved, but it will gradually appear after a period of time.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/eth-merger-successful-when-will-deflation-work-are-there-any-big-risks-ahead-will-there-be-a-lot-of-days-to-unlock-and-smash-the-disk/
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