Coinbase Lists 4 Potential Ethereum Merger Risks

The Ethereum merger remains one of the most anticipated events in the crypto space. The upgrade was scheduled to take place on September 15, 2022. It was a long-awaited blockchain transition as it moved from PoW to PoS. The change will merge the Beacon Chain and the Ethereum mainnet to become a single blockchain.

As an industry event, there has been quite a bit of backlash and discussion regarding the Merger. The Ethereum community has high hopes for the success of the transition. For its part, the Ethereum development team has completed all the necessary checks and steps that will finally trigger the Merger.

After the recent flurry of activity in preparation for and anticipation of the Merger, reactions are running high. One of the world’s leading crypto exchanges, Coinbase, has made some shocking revelations.

Coinbase Cloud had detected four potential risks with the Ethereum merger. The risks are operational, technical, lack of customer diversity and financial.

Potential Ethereum Merger Risks

Based on its highlights, Coinbase also offered some details about the risks.

Operational risks: Remember that during Bellatrix, there was a drop in participation of node operators and validators. Some of the operators did not complete the upgrade for their customers. There are also some behind-the-scenes activities such as testnets, customer releases, last-minute releases, and more.

According to a recent developer report, only 85% of nodes have completed the necessary and latest client versions. Additionally, there are records of approximately 25% to 30% of validators unable to complete the Sepolia upgrade. They were thrown offline due to problems according to the configuration.

Technical risk: Merge involves merging two different blockchains, the Ethereum mainnet and the Beacon Chain. While the former is based on PoW, the latter is based on PoS. This makes Merge one of the most technically complex upgrades in the crypto space. Hence, it is very prone to bug attacks and other technical problems.

An example of errors with upgrading the Nethermind and Go Ethereum (geth) runtime clients was presented. However, the dev team provided a handy fix and possible guidelines to avoid a repeat.

Risk of lack of customer diversity: Once a client lacks diversity, it could increase the risk of a consensus client being dominant among others. Such a client can violate the consensus or even use its terms to propose blocks.

Financial risk: With the merger, miners will become irrelevant to the Ethereum blockchain as validators take over block production. Also, the type of GPUs for ether mining is different from that for BTC. So they can even turn to Bitcoin mining. Their alternatives will be in any available mineable coins.

Coinbase Lists 4 Potential Ethereum Merger Risks
Bitcoin is falling on the l BTCUSDT chart on Tradingview.com

In addition, the Ethereum PoW fork can create significant problems with protocols and dApps on the blockchain.

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