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Ethereum 2.0: Merge Update and Hard Fork

merge_ethereum_upgrade

The Ethereum Network upgrade Bellatrix – known as ‘Merge’ – is estimated to go live on Mainnet 19th of September, according to wenmerge.com. Coinfirm is prepared for the possibility that the update will lead to a hard fork of ETH.

What is the Ethereum Merge Update?

Merge is the update that will shift Ethereum from the energy-intensive Proof-of-Work (PoW) to a greener Proof-of-Stake (PoS) blockchain with the merging of the current Mainnet and the Beacon Chain system (energy consumption is poised to decrease by 99.5% post-Merge). The major update will pave the way for the next upgrades to the network’s roadmap – the ‘Sharding‘ in 2023 – that will enable 100,000 transactions per second and super-low transaction fees.

The anticipation of the Merge update – with many seeing the move to PoS as deflationary for the asset – has been the underlying reason that led outstanding options interest for Ethereum to be higher than that of Bitcoin ($6.6 billion vs $4.8 billion (08.08.2022)) for the first time in history.

Why Might a Hard Fork Occur and What are the Potential Downsides?

Most Ethereum network miners are highly likely to vote for a hard fork, due to the loss of income they will suffer from a PoS Mainnet.

The Ethereum Classic hard fork in 2016

The hard fork could lead to the devaluation of NFTs minted on the original blockchain as well as a host of scammers looking to take advantage such as those looking to “help you claim your new coins”.

How to Ensure You Have Both Coins

Some exchanges such as Poloniex and Gate.io have already listed assets such as ‘ETHS’ and ‘ETHW’ on their platforms awaiting the split. Holders of Ethereum in unhosted or cold wallets will automatically be granted the new coins on the new network.

AML-ready

Coinfirm is ready to support the newly created chain forking from Ethereum into the AML Platform for anti-money laundering and combatting the financing of terrorism compliance, should a hard fork occur following a chain split.

Looking to comply with crypto AML stipulations?

Contact Coinfirm or sign up/log in to the AML Platform to experience the most flexible crypto RegTech platform powered by more than 350 proprietary risk analysis algorithms.