Crypto News / Cryptocurrency / Ethereum (ETH) · October 7, 2022

Merge Aftermath Could Land Ether Some Serious Trouble

One of the biggest complaints that people have had with cryptocurrencies is their dependence on and consumption of electricity. And while most of the cryptocurrencies in the market were still finding ways to make their crypto much greener, Ether came out with an entire plan to make reduce their electricity consumption by 99%.

While it may sound completely impossible on a brief inventory, the truth is that they simply changed their consensus mannequin. They essentially move to a proof-of-stake system, instead of the regular proof-of-work framework that most companies are using. Just by shifting to this new framework, they will be able to significantly reduce their carbon footprint.

However, as many analysts were quick to predict, making this change could come with problems. But one issue could be more subtle and it could them in the long run.

Introduction of Ether Staking

The major change that came with the Merge update was that Ether was moving away from mining, and would instead focus on staking. This system will significantly reduce the carbon emissions produced as a result of constant mining, and can even help ease the load on their internal system.

Staking In Ethereum requires people in the community to become validators, which can allow them to stake their crypto. However, this can come with a serious problem, especially if the requirements to become a validator are very steep.

The Problems that come with Ether Staking

If the price to become a validator is too high, it could greatly reduce the number of people who can stake their Ether. And with a smaller pool of investors to stake crypto, the crypto’s growth could slow down significantly.

Unfortunately, the requirements for becoming a validator are very high, with investors who have more than 32 ETH or $41,000 invested, as of writing. This greatly shortens the pool of people who can stake their Ether, which is great for people who have that money invested but is not good news for old investors who have been holding on for a long time.

Will Staking be for Everyone?

This can be a difficult question to answer since the decision has the community split. Many of the builders obviously feel left out, with their powerful rigs for mining no longer being useful in Ethereum. These builders found the old consensus mannequin very comforting, and that they will have to adjust to the new setting.

The major concern here is bandwidth consumption, which has skyrocketed because of how Ether’s staking is set up. In fact, the bandwidth requirements for staking Ether are so inconvenient that even people who become validators might not bother with it. Suffice it to say, people who are tech savvy will only be able to start staking on Ether.