Ethereum war is brewing – The network Ethereum (ETH) will pass Proof of Stake (PoS) in a few days. Faced with this transition, some miners are considering creation of a fork retaining the Proof of Work (PoW). Between management of old tokens and new ones, difficult to navigate. Let’s see together what will happen to your ETH tokens.
The Merge: the long-awaited Ethereum update
The Ethereum network will experience a major update by changing its mode of consensus. Indeed, Ethereum will abandon Proof of Work in favor of Proof of Stake.
This complex transition carried out in several stages has been called “The Merge”. This one will start on September 6with the deployment of hard fork Bellatrix on the beacon chain (Ethereum chain secured by PoS). As a reminder, the beacon chain is a blockchain that evolves in parallel with Ethereum and whose sole mission is to ensure consensus in proof of stake.
The Merge will continue with the deployment of the Paris update on the Ethereum mainnet, between the September 10 and 20 next. Once the Paris update is released, it will take Ethereum 12 minutes to switch consensus mode.
As this historic event approaches, there are many questions regarding token management before, during and after the transition.
No new token planned so far
First of all, let’s make one point clear. The Merge and the transition to proof of stake do not introduce no new token for Ethereum. Thus, your ETH will remain ETH.
As a user, no action will be necessary on your side. Sit down! Take something to snack on, and enjoy the show that will be the transition! Whether you have your ETH on wallets self-hosted or on exchange platforms, such as Binance or Coinbase, you will not have no action to bring.
Keep that in mind! Indeed, scammers could take advantage of this transition to try to make you buy ETH 2.0 tokens, when these do not exist. Likewise, it will not take not send funds to an address to get supposedly new ETH tokens. Ditto for ETH staked on the beacon chain, you will not be able to recover them directly. The unlocking process will be staggered and will begin in 2023.
PoW vs PoS: soon the birth of an Ethereum fork?
As the fateful date approaches, several prominent miners have expressed reluctance to move to Proof of Stake. Consequently, some have put forward the idea of creating a ethereum forkingwhich would maintain the Proof of Work. A situation that is very likely to happen. Indeed, many debates are raging around this fratricidal war between Eth 2.0 and EthPow.
In case of fork, the ETH token will represent the chain in Proof of Stake and a new token: for example, ETHPow could emerge. In practice, this should be automatically distributed to addresses on the new chain, depending on the number of ETH held on the chain in proof of stake.
For their part, exchanges will communicate individually about the distribution of tokens to users holding ETH on their platform.
Moreover, as has in particular Explain Binance, the new token will have to pass the regular check-in process to be able to be traded on these platforms. The process can take between a few hours and a few days.
While waiting for The Merge, the Ethereum Foundation decided to quadruple the amount of its program of bug bounty. In this case, a bug affecting The Merge may report up to $1 million to the person who discovered it.
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