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 execute smart contracts in the proof-of-stake system, as well as the full history and current state of Ethereum, to ensure a smooth transition 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 last public testnet before the transition to proof-of-stake, which is expected to happen later this year. This is a major milestone for the Ethereum network as it prepares to undergo 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 merger?
“The likelihood of net ETH deflation is consistently quite high post-merger,” said Brian Krogsgard, co-founder, CMO of Flip during a podcast appearance. Moreover, he added,
“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 merger would likely be rolled out in a bear market. This means that the market may not accept the merger 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 2018 bear cycle, we could see peaks to troughs ranging 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 could also see a potential super cycle in the future. Rather than going down, maybe the chart is going sideways. With war, the easing of COVID-19, and rising prices, these factors may well 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 bitcoin, they got a reward, that’s not a super cycle. You go through a so-called bear market and all activity remains profitable in the market and retains productivity, it’s a bit of a super cycle.
