Environmentalists might be rejoicing after Ethereum cryptocurrency successfully completed “The Merge” yesterday. However, several investors aren’t happy with the transition. This is primarily because the transition from proof-of-work (PoW) to proof-of-stake (PoS) hasn’t really offered any real-world benefits or lowered incurred costs.
Ethereum moving from PoW to PoS could mean gamers have a lot more graphics cards available in the second-hand market. However, in an FAQ, the Ethereum Organization confirmed that The Merge would not have any noteworthy impact on the speed of transactions, and the expenses involved in getting a transaction completed and authenticated would remain the same.
Those hoping PoS Ethereum would make transactions cheaper have been disappointed. The Ethereum Organization claimed that after transitioning to PoS, the energy costs of Ethereum should decrease by around 99.95%. However, this will have no impact on the transaction costs, commonly known as “Gas Fees”.
The busier the Ethereum network, the higher the Gas Fees. However, despite a massive reduction in processing power needed to validate a block under PoS, the Ethereum Organization claimed nothing has changed “that directly influence[s] network capacity or throughput”. In other words, gas fees will remain unchanged.
The second complaint from many cryptocurrency owners and traders is that transactions involving PoS Ethereum take nearly just as much time as the earlier PoW iteration.
Historically, on proof-of-work, the target was to have a new block every ~13.3 seconds. Under proof-of-stake, slots occur precisely every 12 seconds … this was a fairly insignificant change and is unlikely to be noticed by users.
Investors are also concerned because the Ethereum Organization will reportedly continue to cap withdrawals. This safeguard should ensure there’s no cascading effect due to mass selling, but it does keep investors away from their own investments.