Today is the test case that will see the Beacon Chain undergo the Bellatrix hard fork before the long-awaited Ethereum Merge, which will take place between September 10 and 20.
Summary
What is a Fork and what it entails, the Ethereum case
Today is the big day. Bellatrix, that’s the name of the most important Fork ever for Ethereum, which will introduce into the chain of the second-largest cryptocurrency by capitalization the changes necessary for it to transition ETH from Proof Of Work (POW) to Proof Of Stake (POS).
Before delving into the heart of the news, elaborating on the importance of this day for the currency, it is first worthwhile to comment on what a Fork is and what this entails.
A Fork is a novation of the main chain of a given Blockchain that gives rise to a new chain with which it shares history, but which is an update of the one from which it derives.
Both currencies, the primal and the new, exist simultaneously while being different. For example, in the world of telephony we can observe how cyclically an update of iOS and/or Android becomes necessary. This update, greatly improves the fluidity as well as the functionality of your cell phone. However, those who feel that the previous version is better can always stick to it.
Forks can be of two types. Soft if these concern feature upgrades or simply speed of operations etc., or Hard when the community or a team building radically transforms the chain giving birth to a new one.
The Bellatrix upgrade and its function
Today is the big day for Bellatrix. The update will bring the necessary changes to Ethereum to move from Proof of Work (based on mining) to Proof of Stake, based precisely on staking.
In this case we are speaking of a Hard Fork since the change introduced undermines the foundations of the chain itself, or rather modifies its nature by moving to a greener protocol that will reduce pollutant emissions by 99%, since mining will no longer be a viable route.
A necessary clarification must be made. Today there will not be a transition from PoW to PoS, but rather the implementation of the changes necessary for the transition of the Ethereum blockchain, which will take place sometime between next September 10 and 20.
According to calculations, the final transition should take place on September 15.
In essence, this is the last test case before the final transformation, and the smooth success of Bellatrix and the Merge would lead, not only to something new, more functional and more valuable (presumably), but it will help make the world greener and will be a driver for the entire digital currency market.
If the second-largest currency by capitalization were to go through today’s important transition and the epochal one in a few days with momentum, all cryptocurrencies would benefit, with volumes around ETH, but also around BTC and the other cryptocurrencie, increasing significantly.
The Merge: the transition of Ethereum from PoW to PoS
Ethereum (ETH), discounts the fact that it has become so established among investors that fees on the network over time have risen significantly, to the point of hitting $50 per transaction in the winter of last year.
The Merge constitutes a key upgrade for Ethereum. Once successful in moving to the Proof of Stake consensus system, programmers can get to work on scaling the network so that it is more practical for everyone.
It is no coincidence that ETH almost reached $2,000 in mid-August and has currently undergone a physiological reversal, which at any rate has it floating between $1,500 and $1,600. Following this Fork, the lower issuance of Ether is expected to turn the currency into a deflationary crypto adding further appeal.
Those who currently have ETH in their wallets will also get new coins on different blockchains completely free of charge, which, however, may have a different value. A veil of mystery still remains over this.
The newly created chain will be in all respects the same as the previous one, but compared to it it will have a staking-based protocol. This will result in easier transactions and is believed to be more valuable, although the currency in the last 30 days has lost value significantly. Many analysts agree that this move will be rewarded and that the value of ETH will rise significantly if all goes as it should.
The mid-September transition on paper will put an end to the currency’s miners, but some believe that will not be the case at all.
Ethereum’s possible hard fork to continue to support mining
ETHPoW, according to some experts, could be a new chain that could support miners and continue to rely on Proof of Work (POW).
Many exchanges, in order to protect themselves from possible problems arising from this complex and very important transition, have decided to block operations for the days leading up to the Merge according to these “to protect” investors, although the suspicion is that it will be the platforms themselves that will protect themselves with this move.
Finally, it must be said that the new “ETH rewards” to Ether holders will be issued only to those who will hold the currency on their wallets and not on the platforms.
Vitalik Buterin, co-founder of Ethereum, said he is confident about the move to PoS and believes that this event will give new impetus to the entire crypto world, although he expects a certain (physiological) percentage of sell outs after the Merge, especially if this goes well and the value of ETH rises by a lot.
As evidence of Buterin’s words, a CNBC report shows how many ETH investors have been betting on both downward and upward volatility in the value of the currency, so as not to miss any opportunities that the move may give, especially given the hype that is forming around the event.
Some have even gone further by speculating that in the more or less distant future Bitcoin may also turn to Proof Of Stake, but at the moment there are no plans for structured proposals along these lines.
