Ethereum 2.0 and ETH Ropsten Merge Explained

Ethereums merge this is one of the Biggest stories in crypto and it’s now As a project moved one step closer to Its end goal Eth 2.0 yesterday we witnessed roxton That’s ethereum’s longest running test Net successfully transitioned to proof Of stake as an algorithm so from pow to Pos many investors as well as ethereums Do have a lot riding on this successful Transition to pos we’re all hoping for The best of course but there is still a Lot of confusion around it and you know What understandably so ethereum is Trying to redesign the plane while the Plane itself is still flying effectively And is up in the air so of course it’s Going to be confusing and scary Simultaneously Then there are the eve maxis who for the Last two and a half years kept saying That the merge will happen in another Six months and then it was in another Six months and in another six months Even the eighth developers don’t really Know when it’s gonna happen exactly but They expect it to be soon But here’s the thing with roxton on pos We now have this new ray of hope that Has broken through the cloud cover some Important questions come to mind with Regard to this final merge what do we Know what don’t we know and what can we Ultimately expect from a successful

Implementation that is exactly what We’re covering in today’s video this one Is all about the ethereum merge [Music] Welcome to the channel my name is matty And this is altcoin buzz we are a crypto Investment research company we have Documented many 100 x returns on coins And tokens that are top projects today Really before anyone else was even Talking about them and if you want to See our detailed process for researching Such projects then our new and improved Altcoin buzz access group is for you our Plans start at 99 Monthly be sure to click the link below For more information whether we’re Talking about ethereum other Cryptocurrencies or any kind of Financial asset just remember that Investment does have corresponding risk And so as you’re watching this video Yeah soak in the information but do not Consider it to be official financial or Investment advice and with that let’s Talk about this historic merge now why Did i use that term just now why is the Robston merge such a historic event While it’s a crucial step before Ethereum’s actual transition to the Consensus layer which was formerly known As eth 2.0 in essence the robston merge Will give developers the first taste of What things will look like in the future

When ethereum finally makes that move to A less energy intensive pos algorithm Mechanism And it’s pretty clear that a successful Merge on the test net would bode well For ethereum’s mainnet and its Transition the process has been in the Works for some years it’s been a while And in fact robson was kicked off in 2016 so it really has taken quite a long Time with multiple delays yes there were Some waves of frustration that were sent Out among the community and investors of Course but the new pos model is supposed To solve many of ethereum’s biggest Issues such as high transaction costs And the network’s ability to scale so The stakes are indeed very high this Being the biggest upgrade in ethereum’s History and so if it is successful it’s Most likely going to be the biggest Event in the crypto industry this year But before we break down when merge why Merge it’s important to get some context Straight and take a look back on Ethereum and its progress up until now This is the best way to give you a Better sense of why this merge is so Crucial in the first place so ethereum Already has a couple of controversial Aspects in its history all of this Before the merge delays were even Something that we were discussing the Eth foundation which includes vitalik

And other co-founders like gavin wood Who went on to found polka dot as you May know the eath foundation started in 2014 and the foundation’s goal really From the beginning was not to be money Like bitcoin but to be the system that People built their decentralized apps on Kind of like a decentralized version of Microsoft windows That’s not controversial but pre-mining Is and ethereum did a lot of that Bitcoin had a fair launch meaning anyone Could mine and get the 50 btc block Reward and then anyone could trade their Coins to others that may have wanted to Buy Ethereum who started and still uses Miners in a pow system they mined their Coins in advance which allows heavy Insider concentration in fact a full 10 Percent were mined in advance just for The eth foundation and that’s kind of a Big deal because the creation of coins Through mining is supposed to happen as The network is in use producing blocks The way bitcoin and other pow chains do It and this is exactly why you hear all Kinds of people not just bitcoin maxis Say that eth is a scam If the industry was larger at that time Many would be facing criminal Prosecution in our opinion that’s the Likelihood at least there are arguments Of potential fraud or self-dealing for

The portion of the pre-mined coins that The owners sold to themselves at least Allegedly but then 2016 happened with Something that threatened eth’s very Existence altogether this was the dao Hack the first major dow on eth was Hacked during its ico For those of you that were in the space You may recall that icos were a pretty Big deal back at that time with the hype That the nft and ido drops kind of have Now that was more or less the equivalent Icos that is back in 2016. And in this hacking event the hackers Took 3.6 million each not 3.6 million Dollars 3.6 million ether and so what The ethereum foundation decided to do Was hard fork eth rendering that 3.6 Million each worthless and the community Voted to do this but many wanted to keep The immutability aspect of the Blockchain these are the so-called code Is law people those in favor of Immutability and keeping the old chain As it was Forced it to become what is now eth Classic which without much fanfare is The number 28 project in crypto we don’t Often talk about etc ethereum classic All that much but not bad actually today It’s number 30 but still a pretty good And fairly perennial project that’s been Around for quite a while but what about Those that decided to go along with the

Hard fork well they represent the Community behind ethereum that we know And love today that’s the number two Project of course only behind bitcoin so Look eth to be fair is not without its Problems and controversies but that Being said let’s switch into a more Optimistic gear and look at the impact Of the merge and what it really Represents okay first question why merge Well there are a few reasons why eth may Want to make this change tech Entrepreneur and dallas mavericks owner Mark cuban explains in a fortune article Why he thinks it’s a hugely bullish move To go to pos and in a nutshell here the Main reasons are that there’s Environmental advantages scaling issues Are nearly solved not entirely there’s The ability to add sharding and also Fewer issued after the change along with Eip one five five nine let’s talk about That first reason so the environmental Concern is a major one even legacy Financial publications have been talking About this pow mining thing and they’re Not crazy about it now bitcoin Specifically and other pow chains have Reasons to continue using it especially For security but for eth it’s actually a Pretty good move and projections are as High as 90 That is to say there’s going to be 90 Percent less energy usage with a pos for

This particular blockchain scaling Issues are another big deal because eth Can’t scale i mean that’s the main issue Here for every new crypto kitties or Board ape yacht club collection or new Game that gets popular It really bogs down the network it slows To a crawl and gas prices skyrocket at The same time and this is why axey had To create its own side chain ronin just To be able to run their game many people Don’t know this but gas prices vary Based on the type of transaction you Have So for example today a usdt transfer of The erc20 token there’s a range but the Average price that you’re going to pay Is 3.69 in gas but if you want to do a swap On curve for example let’s uh scroll Down just a little bit you can see the Average is more than 10 times higher 51.22 Which means that this is not a great Deal Unless you’re moving a lot of money but For smaller amounts it’s not efficient And it’s not effective and this dynamic Unfortunately creates a trap for small Retail eth users because it costs more Than the amount they have in gas to move Their tokens rendering them stuck where They are and very often they’ll choose Not to use the network at all in these

Circumstances when costs are that high The ability to add sharding is another Very very important feature so vitalik Buterin himself has said more than once That sharding is the future for ethereum And it’s actually easier to add sharding To a pos chain as opposed to a pow chain And the primary reason is that with a Pow chain part of the work involved Means that every node downloads and Holds onto the entire history of the Chain That’s great for authentication but Pretty lousy for speed and sharding is a System where the nodes or validators in This case only have to hold part of the Chain’s information the information is Spread out over many many validators and There’s enough redundancy that if some Validators happen to go down well the System can still access every block in The chain when configured correctly so If the validators don’t need to hold or Download the entire chain’s information And history it can move a lot faster and This would give eat the scaling it Desperately needs silica and near both Use sharding and this increases their Throughput transactions per second and Brings costs down significantly so Finally we need to address how fewer eth Are going to be issued after the merge And Eip1559

So miners get rewarded for finding the Block with the block reward and that Reward comes in the form of new coins Issued on the pow chain that’s the same As how bitcoin works and for now that’s How eth works too but after the change There will be no more miners new eth Will go to validators for validating Transactions and at a smaller emission Rate than the current one for pow so First and foremost fewer ether will be Issued and then you also have eip1559 Put in place last year it changes the Fee structure to include a base fee that Users pay regardless of the type of eth Transaction and then a tipping mechanism Comes into place where you can add to That if you want your transaction Processed faster you could think about It like taking an uber or maybe by using Some other transportation app wherein You have a base price and then the Additions for things you request like Door-to-door service or maybe card Processing fees what have you the big Difference is not just the price Structure but the fact that eth now Burns the base price so add the lesser Issuing and the burning of the base Transaction fees and you get fewer ether Some even believe it could make eath Deflationary overall look at it this way On a daily basis eath is burning about 4 000 ether and the total so far burned is

Almost 2.1 million that is a lot of Added value for existing holders and the Net issuance at the same time as those 2.1 million are being burned is 1.2 Million ether issued so It is deflationary at least for right Now but note that as the consensus Article says 1559 will not reduce gas Fees in fact none of these things will Help reduce gas fees but if some of the Scaling options do work effectively then The network will have fewer gas price Spikes than it has in the past all right And when can we expect this massive Merge The short answer is that we don’t know But there are some credible projections That suggest it could happen this summer 2022 But is this a case of hey it’s gonna be Ready in another six months yet again we Don’t know but at least this time around We’re watching what the developers are Saying and doing and after all they are The most informed on the subject and They actually believe it’s shipping by The end of quarter two and the pos chain Known as the beacon chain is actually on Test net right now we’ve covered this in The past okay but what about the impact On the market and l2s One of the things we know is that it Takes 32 eth to become a validator and That’s a lot of money but actually much

Less than many other pos pools but if You don’t have the 32 eth as a requisite You can join a pool and every exchange You’ve really ever heard of pretty much Has one of these validator pools in fact There are over 300 000 validators right Now and we expect that number to grow Because the competition is heavy and Returns are gonna be low in the modest Three to five percent range we also know The network fee will run faster and Chances of it getting bogged down by Isolated events like a super hyped nft Collection those chances will decrease As well what about l2s well ethereum Developer mariusz van der wijjen says he Expects layer 2 solutions to still be The solution to scaling eth now and in The long term payment channels and Rollups will continue to lead because Layer 2 solutions just reached 7 billion Dollars in tvl and total value lock that Is a new record more and more eth users Are turning to arbitrarium loopering Optimism or polygon for more speed and Lower fees and look the main point here Is that sharding and pos together could Be the long-term scaling solution for Ethereum but that being said when the Merge happens what will mostly occur for Eth users is more of the same gas fees Will likely not drop not right away and Layer twos will still continue to grow We see no reason for them not to what

About all these so-called ethereum Killers Well first of all almost all of them run Pos already they all run faster and Process more transaction than eth does Even on their evms and for many they Offer more than just the ethereum Virtual machine avalanche for example is One of a few That made a dedicated separate chain to Run evm with its c chain and other apps Use a different chain cardano does this As well so chains like these or like Polka dot and maybe cosmos that have Other goals like interoperability should Not see much change in demand when the Eth merge happens at least not in our Opinion in fact we think there’s enough Room for all of them to grow it’s not Slices of one pie it’s multiple pies That are being baked here all of them Delicious all of them have different Flavors and there’s room for a lot of Winners in this space that continues to Be Our perspective so that is the latest on The merge what do you guys think is Going to happen to eth when the merge Does take place and what are your Thoughts about your other favorite Chains how they’re going to be impacted Projects like avax saul ftm Luna dot polka dot do you think that They’re gonna get positive or negative

After effects from the merge we’re gonna Find out soon enough but curious to know Your thoughts about this as always be Sure to sound off in the comments below If you’re still watching this video Kudos be sure to like subscribe share And hit the bell to receive Notifications never financial advice but Best of luck genuinely check out these Related videos popping up here popping Up here stay safe out there members of The altcoin buzz army and as always we Do hope to see you again soon In our next video take care