After Ethereum’s merge Bitcoin might be ‘regulated away’
After the completion of Ethereum’s Merge upgrade, independent crypto researcher Kyle McDonald outlined last Friday (2 September) why authorities may pay even more attention to Bitcoin because of its high energy usage.
The Ethereum Foundation describes the Merge, which marks the shift of the Ethereum network from Proof-of-Work (PoW) to Proof-of-Stake (Pos) consensus, as follows:
“The Merge signifies the union of Ethereum’s current execution layer (the Mainnet we use today) with its new proof-of-stake consensus layer, the Beacon Chain. It removes the need for energy-intensive mining and uses staked ETH to safeguard the network. A tremendously exciting step towards accomplishing the Ethereum goal, with increased scalability, security, and longevity.”
“It is crucial to recall that Beacon Chain was first distributed independently from Mainnet. Ethereum Mainnet, including all of its accounts, balances, smart contracts, and blockchain information, continues to be protected by proof-of-work while Beacon Chain operates in parallel utilizing proof-of-stake. Proof-of-work will be permanently replaced by proof-of-stake at the next Merge, at which point these two systems will be unified.
“Let’s think about an analogy. Consider Ethereum to be a spacecraft that is not yet prepared for interplanetary travel. With the aid of the Beacon Chain, the community has constructed a new engine and a reinforced hull. After extensive testing, it will soon be ready to replace the old engine with the new one mid-flight. This will integrate the new, more efficient engine into the current spacecraft, making it ready to conquer the cosmos in lightyears.”
According to a story published by CoinDesk on Friday, September 2nd, McDonald believes that it is preferable to sell Bitcoin now since its price may fall if it is prohibited by authorities.
And the reason McDonald is concerned about Bitcoin acquiring Bitcoin after the Merge is that Ethereum’s transition to the far more energy-efficient PoS consensus may convince authorities that PoW was never necessary.