The Ethereum merger remains one of the most anticipated events in the crypto space. The upgrade was supposed to take place on September 15, 2022. It was a long-awaited blockchain transition when moving from PoW to PoS. The change will merge the Beacon chain and the Ethereum mainnet to become a single blockchain.
As an event in the industry, there have been several reactions and discussions regarding the merger. The Ethereum community is hopeful for the success of the transition. For its part, the Ethereum development team has carried out all the necessary checks and steps that will finally activate the merger.
Following the recent flurry of activity on the preparation and expectation of the Merger, the reactions are intensifying. One of the world’s leading crypto exchanges, Coinbase, has made some shocking revelations.
Coinbase Cloud had identified four possible risks with the Ethereum merger. The risks are operational, technical, lack of customer diversity and economic.
Potential Ethereum Merger Risks
Based on its highlighted points, Coinbase also offered some details on the risks.
Operational risks: Recall that during the Bellatrix, there was a drop in the participation of node operators and validators. Some of the operators have not completed the upgrade for their customers. Additionally, there are behind-the-scenes activities such as testnets, client releases, last-minute releases, and others.
According to a recent developer report, only 85% of nodes have completed the latest required client builds. Additionally, there are records of approximately 25% to 30% of validators who failed to complete the Sepolia upgrade. They were taken offline due to configuration issues.
Technical risk: The merger involves merging two different blockchains, the Ethereum mainnet and the Beacon chain. While the former is PoW-based, the latter is PoS-based. This makes the merger one of the most technically complex upgrades in the crypto space. Therefore, it is highly prone to bug attacks and other technical issues.
An instance of the bugs was encountered with the upgrade of Nethermind and Go Ethereum (geth) runtime layer clients. However, the developer team has provided a workable solution and possible guidelines to avoid a repeat.
Risk of lack of customer diversity: Once a customer lacks diversity, it could increase the risk of a consensus customer being dominant among the others. Such a client may violate the consensus or even use its terms to propose blocks.
Economic risk: With the merger, miners will become unnecessary on the Ethereum blockchain as validators will take over block production. Also, the type of GPU for mining Ether differs from that for BTC. So they can even switch to Bitcoin mining. Their alternatives will be on all available workable parts.
Additionally, the Ethereum PoW fork can create significant issues with protocols and dApps on the blockchain.
Featured image from Pixabay, chart from TradingView.com