withdrawals and deposits will be suspended
The update is scheduled to end on September 15; Check out the main points about The Merge below
After years of preparation, the Ethereum merger process, called The Merge, finally began last week. The procedure began with the Bellatrix update, which was to prepare the Beacon Chain for fusion.
Successfully completed, the network is now preparing for the final leg, Paris, scheduled for September 15. This will mark the end of Proof-of-Work mining on the Ethereum Blockchain and the successful completion of The Merge.
Below are the main points to help you understand what The Merge is and how it will affect trading operations at some brokers, such as ProBit Global:
Changing the consensus mechanism
Today, similar to what happens in bitcoin, Ethereum blockchain miners are paid in ETH for processing transactions, from the intensive work of their computers, which is called Proof-of-Work (PoW). . The merger intends to change the consensus mechanism from PoW to PoS (Proof-of-Stake), eliminating mining. Thus, network transactions will be confirmed in a sustainable way, which will automatically generate large energy savings.
Reduction of energy consumption
A reduction in network energy consumption of 99.5% is expected, as it will no longer be necessary to use thousands of miners and their high-powered computers, which require a lot of energy.
From mining to ETH stake
In Proof-of-Stake mode, miners are actually simple holders of ETH, called validators. To act as a validator for the network, an interested party must block (stake) at least 32 ETH. Those with the highest amount locked in the network will be selected to confirm transactions and earn ether rewards for the task.
In principle, transactions will NOT be cheaper
The update also aims to increase the scalability and security of the network and thus ensure the long-term longevity of Ethereum. At first glance, the upgrade shouldn’t lower fuel prices, but it will pave the way for it to happen.
Cryptocurrency exchanges will temporarily suspend ETH trading during the update
Some exchanges have already gone public announcing the suspension of ETH withdrawals and deposits during the merger phases. This is the case with Binance, Mercado Bitcoin, BitPreço, Foxbit and NovaDax.
Similarly, ProBit Global suspended withdrawals and deposits during the consensus layer update (Bellatrix) on September 6th and will do the same on September 15th to support the execution layer update (Paris).
What will happen after the merger?
If no new tokens are created after merging:
- ProBit Global will resume ETH and ERC-20 deposits and withdrawals as soon as possible. An official announcement will be made.
If the chain is split into two parallel blockchains and a new token is created:
- The token “ETH” will be used for the Ethereum PoS chain;
- Exchange users will receive a minority chain fork token in their ProBit Global wallets at a 1:1 ratio, based on the ETH balance snapshot prior to the Paris execution layer update (at approximately ETH mainnet block height 540,293, or on September 15th). An official announcement will be made about the distribution.
- ProBit Global will support withdrawals of forked tokens.
We remind everyone of the importance of allowing enough time for your ETH and ERC-20 deposits and withdrawals to be fully processed before The Merge’s scheduled end dates.
About ProBit Global
Today, ProBit Global is among the top 30 in the world list of cryptocurrency platforms, providing unlimited access to more than two million users, who trade Bitcoin, Ethereum and over 800 altcoins in more than 1000 markets.
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Warning: This article is for informational purposes only and does not constitute investment advice or an offer to invest. CriptoFácil is not responsible for the content, products or services mentioned in this article.
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