Blockchain projects are ever-evolving; in other words, their main goal is to essentially improve over time and overcome some of the challenges that they are facing.
Some of the first blockchain-based projects that took the crypto sphere by storm, such as Bitcoin (BTC), Litecoin (LTC), Dogecoin (DOGE), and even Ethereum (ETH), all rely on a consensus mechanism known as Proof-of-Work (PoW).
However, this consensus mechanism is extremely energy-intensive, where those that validate transactions and mine the cryptocurrency as a result of that fact spend a lot of money on computing hardware and spend a lot of energy mining the cryptocurrency.
Ultimately, cryptocurrencies have been judged and perceived as bad for the environment due to the fact that PoW is such an energy-intensive process. Whether these claims are accurate is still debatable, as it's likely Visa and Mastercard transactions use up even more energy.
Ethereum is one of the largest cryptocurrencies and blockchains in terms of market capitalization, and it is making the switch to the Proof-of-Stake (PoS) consensus mechanism through an upgrade known as "The Merge", we are going to go over everything you need to know in order to prepare.
What is The Merge, and What Does it Aim to Accomplish?
Ethereum's "The Merge" is a reference to a change in the overall functionality of the blockchain that secures the Ethereum transactions.
Specifically, when Ethereum was first developed, it was developed to run through the Proof-of-Work (PoW) consensus model. This involves nodes, or computers, being a part of a large network, where they essentially compete with one another in order to solve complicated math issues.
The successful ones are then able to mine the next block of transactions and essentially create new coins.
However, this upgrade specifically is aimed at transitioning Ethereum to the Proof-of-Stake (PoS) model, which is a lot more energy-efficient and environmentally friendly.
This is a system that will enable nodes to be selected through an algorithm. In fact, the Ethereum network will reduce its energy consumption by around 99% due to this change.
Their stake in the network is rewarded over the computing power that is currently present in the PoW consensus model.
Those who want to participate will need to deposit 32 Ether (ETH) as a means of activating the validator software. As a validator, they will be responsible for storing data, processing transactions, and adding new blocks to the blockchain.
This will lead to Ethereum remaining secure for everyone, and those that become validators will earn new ETH in the process.
When is The Merge Going to Occur?
Based on an official announcement from the Ethereum blog, The Merge must first be activated on the Beacon Chain with the Bellatrix upgrade.
Once this occurs, the PoW chain will transition to PoS once it hits a specific Total Difficulty value.
The Bellatrix upgrade is scheduled for epoch 144896 on the Beacon Chain, and this is expected to occur on September 6, 2022, at 11:34:47 AM UTC.
Keep in mind that the Terminal Total Difficulty value that will trigger the Merge is "58750000000000000000000", and this is expected to occur at some point between September 10 and September 20, 2022.
How to Properly Invest in Ethereum and Pick the Perfect Timing to Leverage The Merge’s Potential
A question in the minds of a lot of investors that want to get into Ethereum before or past the Merge is what is the perfect time to actually invest in the Ethereum cryptocurrency and how to go on about the process.
It is important to remember that crypto currencies are volatile, and nobody can, with 100% certainty, predict the future value of the Ether (ETH) coin.
However, by implementing the proper investment strategy, investors have the potential to end up on top and leverage their knowledge, strategy, and tools to make a profit.
One of the most popular strategies implemented throughout investments is the Dollar Cost Averaging (DCA) trading strategy.
This is a strategy where investors systematically invest equal amounts of money within a cryptocurrency, regardless of the price at the point in time of their investments.
Furthermore, by utilizing tools such as ZenDCA, this is a process that can be automated. This is one of the best way to dollar cost average crypto.
Currently, you can buy ETH at numerous cryptocurrency exchanges supported by ZenDCA, including Binance.US, Coinbase Pro, FTX.US, and Gemini.
By leveraging the power of ZenDCA, you can essentially create schedules and automatically purchase cryptocurrencies, which will enable you to leverage the dollar cost averaging crypto (crypto DCA) trading strategy to its maximum potential.
Once you buy ETH, you might want to store it securely, and the most secure way through which you can store cryptocurrencies is by using a hardware, cold wallet storage device, where some of the most popular options include the Ledger Nano X and the Trezor Model T.
All you have to do to get started is to create a free account and try out ZenDCA today, after which you can navigate to the “Repeat Buys” and “Automatic Withdrawals” menu, alongside the “Buy Schedules” and “Withdrawal Schedules,” in order to configure everything as efficiently as possible. Now you know how to dollar cost average crypto.
We have gone over the key things you need to keep in mind surrounding Ethereum’s “The Merge” upgrade.
This is by far one of the most significant updates to the overall ecosystem that will affect the entire crypto space due to the fact that there are numerous decentralized finance (DeFi) solutions and decentralized applications (dApps) developed on top of Ethereum.
By leveraging a solid strategy, such as dollar cost averaging and the right tools, you can get the most in terms of returns from this Merge, as after it, there could be a potential spike or difference in the value of the ETH cryptocurrency.