The Ethereum development team has good news: They have successfully mastered the merger of the two chains on a testnet. Meanwhile, the industry is preparing for a crypto winter: After Crypto.com, Coinbase has also laid off numerous employees. CEO Brian Armstrong is taking precautions for a crypto winter: They want to “make sure we stay healthy during this economic downturn”. Armstrong admits that Coinbase has grown too fast: “At the beginning of 2021, we had 1,250 employees. At that time, we were in the early stages of the bull market and crypto adoption was exploding […]. We did our best, but in this case it is now clear to me that we hired too many people.”
Regardless, things are going great for Ethereum: they were able to successfully simulate “The Merge”: Due to the close similarity between the Ropstein testnet and the mainnet, their successful test run can be seen as a good omen for the upcoming mainnet transition. After all, the entire crypto sector has been eagerly awaiting the merging of Ethereum’s mainchain as well as the new beacon chain for quite some time.
From PoW to PoS
This is said to finally enable Ethereum staking. For better scaling, higher speeds and lower energy requirements, Ethereum is currently switching the consensus mechanism from Proof-of-Work to Proof-of-Stake. The process is extremely time-consuming and ultimately dangerous – if something goes wrong, the consequences for ETH are catastrophic. The entire upgrade takes years of preparation, not even counting the implementation.
A look at other smart contract platforms proves that it can work: Cardano (ADA), Solana (SOL) or Avalanche (AVAX), for example, have relied on a PoS consensus mechanism – albeit a modified one – since the beginning. The conversion has not yet been completed and will take some time, but the developers are well on their way. An important milestone in the course of “The Merge”, the successful merge of the Ropsten testnet with its own beacon chain, has been achieved. The Ropsten testnet has been active since 2016. On 30 May, it had launched its own beacon chain in preparation for the June merge test run.
The direction is right, the conditions are unfortunately not particularly rosy at the moment – but especially in wintry crypto times, one can optimally prepare to emerge strengthened from the crisis and to take off fully afterwards. A look at the past proves this: often pronounced dead, the crypto sector has always come back stronger than before. Sceptics should take a look at a price chart of the last 7 years – it will be fine!