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Ethereum network upgrade is happening this week

This week one of the most anticipated events by the crypto community is taking place.

This is the update of the Ethereum network, an update they call “The Merge”, “The Fusion”, the initial phase of Ethereum updates.

The network will only validate transactions using the Proof of Stake (PoS) method, terminating Proof of Work (PoW) validations.

The goal is to reduce power consumption by 99.5%, making the blockchain even more efficient at running protocols. In addition, this update promises to guarantee more security, optimization and scalability.

this update will generate changes in Ethereumbut it can also affect asset prices in the short, medium and long term.

It will not reduce fees or increase network speed, it is just a larger network scalability plan. The network will only work in Proof of Stake (PoS) mode, but it will not be possible to withdraw the values ​​placed in stake yet.

What is clear is that after the event, the issuance of new ETH will drastically decrease. It is estimated that the emissions cut should be around 90%, ETH tokens destined to remunerate miners will no longer be issued and they will begin to receive a reallocation of transaction fees.

On the other hand, it must be taken into account that the Merge update process can go wrong. Any upgrade to a blockchain can go wrong, which is why The Merge has been so long awaited, as it took several months of testing and study.

High volatility events result in higher trading volumes. The Merge will bring significant positive changes to Ethereum, such as the transformation into a much “greener” network, and that attracts institutional investors, so it is clear that there will be a lot of movement in the coming weeks.

More information at ethereum.org.

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