After the "Merge" event, there is a lot of debate over the terminology used in the media and the methods employed to operate the Ethereum network.
Typically, it can be said that Ethereum 1.0 and Ethereum 2.0, there are many new people when entering the market or starting to build projects on this blockchain platform, there will be confusion such as: Ethereum 1.0 has before and Ethereum 2.0 comes later or Ethereum 1.0 will cease to exist when Ethereum 2.0 comes out. For people who are unfamiliar with Ethereum or blockchain technology, these won't be very accurate.
From the end of 2021, the Ethereum developers have eliminated the aforementioned two phrases in favor of new definitions that both reduce misunderstanding and properly explain them in order to be able to define them. Toward the Ethereum network's future expansion ambitions.
The terms are defined as follows:
- Ethereum 1.0 = Execution layer
- Ethereum 2.0 = Consensus layer
- Execution layer + Consensus layer = Ethereum
The Merge is an upgrade to the Ethereum network, not the beginning of a whole new network or token. After The Merge is complete, ether will remain the Ethereum blockchain’s native asset.
Many users have hoped that Ethereum’s transition to a new consensus mechanism would reduce the network’s notoriously high gas fees. According to the Ethereum Foundation, however, The Merge will not expand network capacity, and thus gas fees will remain unchanged.
That said, Ethereum’s next major upgrade — sharding, which is set to launch in 2023 — aims to address gas fees by reducing network traffic and splitting the blockchain into smaller, more manageable parts.
There’ll be a slight improvement in transaction speed, with block publishing time going down from Ethereum Mainnet’s 13 seconds to Beacon Chain’s 12.2 seconds. Despite this 10% increase in speed, the change will be unnoticeable for most users.
If you’re a holder eager to withdraw your staked ETH, note that your funds will be locked for at least 6-12 months after The Merge until the Shanghai upgrade is implemented. For security reasons, Ethereum will rate-limit staking withdrawals once they are enabled.
While ETH rewards from Beacon Chain remain locked and illiquid, validators will have immediate access to tip rewards from Ethereum-based transactions. Those who are holding BETH, on the other hand, will be able to swap back to ETH after The Merge.
The developers anticipate zero downtime if everything goes well during the transition from PoW to PoS. Essentially, the upgrade will just happen, and Ethereum will continue to run smoothly during The Merge.
If you’re holding ETH on Binance, be advised there’ll be a temporary pause on ETH and ERC-20 token withdrawals and deposits; please plan accordingly
In particular during the present Downtrend period of the market, the process of The Merge will cause a great deal of market instability and fluctuations. This time, there will be a large number of con artists showing up to use the opening to further their own interests. As a result, users and investors alike need to keep a close eye on the stability of the platforms where they are holding their assets and limit too many transactions on the Ethereum network at this moment.