Ethereum 'Merge' ends in a key moment for the cryptoma market

Ethereum has completed a long-awaited upgrade of its system to reduce its energy costs and to prepare the soil for more use of crypto technology in mainstream finance.

The upgrade, known in the industry as a "merge", which changes the review of new transactions in Ethereum Blockchain, was completed early Thursday, said co-founder Vitalik Buterin.

Ethereum drives large parts of the web3 world, which includes applications such as digital collectors and decentralized financial systems.

The milestone promised by the developers for many years was celebrated by the fans as one of the most important moments in the short history of crypto who planned "merge parties" in cities around the world and pursued live streams watch parties on social media.

"This is the first step on the big path of Ethereum to a very mature system. There are still steps to take," but Beterin told the developers.

The merger was a test with high operations for the crypto sector after the crash of token prices this spring destroyed the value of digital assets by $ 2 trillion and shaken confidence in the market.

The change in the architecture, which is based on the 200 billion dollar $ ether cryptocurrency, the flagship token of the Ethereum blockchain, and tens of billions of other associated assets and applications, is subject to risks that range from technical swallowing to disputes between the participants of the decentralized network, even after the fusion completed.

His supporters expect a successful merger to strengthen the trust in Ethereum, which was launched in 2015 by the Russian-Canadian programmer Buterin, and the multitude of tokens and projects that run on his blockchain, as well as blunt criticism of his energy consumption.

The Ethereum developers, however, said that they would have to monitor the network in the coming hours and days to ensure that the upgrade works smoothly.

"It is a complicated task," said Edouard Hindi, Chief Investment Officer at the crypto hedge fund Tyr Capital. "A forgotten fine -tuning.. Could lead too much volatility, and the market is in a panic mood."

The merger is only one step in a plan designed by the Ethereum developers in order to overcome the capacity limits of the network, which are viewed as a major hurdle for the general introduction of decentralized finances.

"[The Merge] solves a problem, but it doesn't solve many other problems," said Lars Seier Christensen, co-founder of Saxo Bank, which is now operating a blockchain project called Concordium.

Ethereum has so far rely on the fact that network participants solve complex mathematical problems to validate new blocks, a process that is referred to as proof of work. The energy consumption of Ethereum was similar to that of Finland.

The merger refers to the moment when the existing Ethereum blockchain is connected to a new network in which transactions are validated by a group of individuals and companies that have used their own tokens as security for the safety of the network, a system that is referred to as Proof of Stake.

The Ethereum Foundation estimates that the replacement of the Proof of Work will reduce the energy consumption of the blockchain by around 99.95 percent. It will also remove the need for Ethereum miners, companies that earn money with the validation of new blocks on work evidence.

The expectation of the merger has contributed to boosting the price of ether, which has increased by around 75 percent since its low in June. Ether has won the ground compared to Bitcoin, which has only recovered by 15 percent in the same period.

The years of efforts to complete the upgrade underlined the difficulty of making improvements to the Ethereum blockchain. Transactions in the network are still hindered by slow speed and high costs, which, according to critics, limits the system's ability to grow.

Hindi said that the merger was "only one step in the right direction. There are three or four further steps. It is a two or three years of trial. It is a large, large plan that is implemented, and we will experience many surprises on the way, good and bad."