It has been one month since Ethereum lost the essential feature that its blockchain shared with Bitcoin. (BTC) The Ethereum Merge was a long-awaited upgrade that was widely celebrated by the blockchain ecosystem. It felt more like an early Christmas for sci-fi geeks than a Star Wars Day for the general public.
The Ethereum Merge, which took place on Sept. 15, saw the largest blockchain ecosystem part ways with the proof of work (PoW), an energy-hungry consensus mechanism that made Bitcoin tick. The Ethereum blockchain works now on a more eco-friendly Proof-of-stake (PoS), which doesn’t require any mining activities. This has left thousands of miners around the world scratching their heads.
Bitcoin has yet to see a price drop from its closest competitor. The Ethereum Merge has been a month since then, but the BTC price remains between $18,000 to $20,000.
The overarching narrative that Bitcoin should help the world and not destroy it by depleting its energy resources is being rekindled with Ethereum’s notable switch to a system that preserves blockchain’s existence while consuming minimal resources.
Ethereum avoided a final death
Cointelegraph reached out and gathered information from industry professionals to gain a better understanding of the impact of the Ethereum Merge on Bitcoin.
“PoW was an end for Ethereum,” said Tansel Kaya (a lecturer at Kadir Ha University and the CEO/CEO of Mindstone), “Because an Ethereum Network that doesn’t scale cannot live up to its promise.”
Kaya says that the Bitcoin community was not pleased with the actions of its largest price competitor. He noted that the BTC community frequently criticizes PoS because it is vulnerable to censorship.
“If [Bitcoin maximalists] are correct, Ethereum will become either a docile fintech networking that is censored and controlled by governments or a centralized structure such as EOS, which is controlled by wealthy investors.”
Gregory Rogers, founder and CEO of Graceful.io, a crypto-based gifting platform, spoke to Cointelegraph. He noted that the Merge strengthened the positions of the two distinct blockchains in the market. Rogers stated that Ethereum is still the preferred transaction chain due to its speed and lower fees. He also said that Bitcoin is the store of value of preference. The Merge clarifies that they were already heading in this direction.
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Tashish Raisinghani, CEO of multichain marketplace UnicusOne, believes that Bitcoin will suffer a drop in price. He stated that “the crypto industry was having a difficult time due to macro-level problems which resulted into the current bear market.” Tashish Raisinghani, CEO of UnicusOne, said that Ethereum Merge would make it more sustainable than Bitcoin. “Which hasn’t yet been able recover from the Chinese mining crackdowns in 2021.”
PoW is the best in network security
John Belizaire (CEO of Soluna Computing), addressed the energy aspect of the debate and said that while Ethereum’s move to PoS may save energy, it will also weaken the core decentralization aspects of cryptocurrency.
While Bitcoin’s PoW consensus mechanism can be energy-intensive, it is essential to the blockchain. It “is the best choice” for any cryptocurrency that prioritizes network safety.
Belizaire said that co-locating flexible crypto mining centres with renewable energy plants can stabilize the electric grid and solve the renewables’ wasted electricity issue. It also provides a plentiful source of cheap energy for crypto miners.
The Merge brought together crypto miners
Bitmain also reduced the price of Antminers, its flagship cryptocurrency mining unit, to help miners regain their profits, he said.
According to Andy Lian (author of NFT: Zero to Hero), Ether (ETH), miners will not forgo PoW mining because Ethereum Classic (ETC), which is no longer minted via mining, has been averted. Cointelegraph was informed by Lian that the EthereumPoW project (ETHW), which is the result of a hardfork following the Merge, is doing well and the miners are more united than ever.
“These diverse factors helped the miners offset operating costs in this bearish market, keeping them alive.”
Joseph Bradley, Heirloom’s head of business development, compared Bitcoin to “a global asset that is correlated with TradFi markets.” He explained that Ether might be traded in a similar way, but it doesn’t have the same market depth or size as Bitcoin. He asks rhetorically, “Do you expect the world will become more chaotic or less in the future?” and then responds:
“Most people would prefer chaos. During this period, security will be important. Bitcoin will be even more important. The cost of energy will drive innovation among miners. They will most likely position Bitcoin mining as an extension to the electrical grid.
Bitcoin and Ethereum: “Apples to oranges”
However, not everyone believes that the Ethereum Merge would have an impact on Bitcoin. Martin Hiesboeck is the head of research at cryptocurrency exchange Uphold. He dismissed any direct comparison between Ethereum, Bitcoin, as “apples, oranges.”
Hiesboeck explained to Cointelegraph that Ethereum was essentially a company controlled by venture capitalists. That’s why the transition from proof-of-stake seeks to improve its economic as well as environmental credentials.
“Bitcoin doesn’t have to do this. Bitcoin is not a company. Bitcoin is a computer network. Its output is money. It is not owned by anyone. There is no brand. There is no CEO.
Khaleelulla Baig (founder and CEO of cryptocurrency investment platform Koinbasket), supported Hiesboeck’s argument. She told Cointelegraph that the Merge will not have any significant impact on Bitcoin because these assets serve different purposes.
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According to Baig, Bitcoin’s purpose “is to prove itself to be a superior store-of-value to fiat currencies.” He said that the PoW mechanism is compatible with Bitcoin’s purpose, as it “helps the network maintain the scarcity 21 million BTC via the difficulty adjustment rate.”
By utilizing their best features, Bitcoin and Ethereum are both making important contributions to the crypto-asset ecosystem. Tansel Kaya sums it up: “Having two different approaches than one is better for the spirit decentralization.”