Ethereum Merge risks you should know about! Excitement and nervousness are both brewing in the community as it begins to near the long-awaited Ethereum Merge to a Proof-of-Stake consensus this September 15th.
Firstly, there are many positives to come from the Merge, including a major decrease in energy consumption as well as setting up the foundations for future upgrades such as improving scalability and efficiency and lower gas fees. However, with such a big move like switching from Proof-of-Work to Proof-of-Stake, it’s only natural that there can be some risks involved that the community needs to be aware of.
Major Drop In ETH Price
With a lot of changes being made to the blockchain and Network, there could be a number of issues and or bugs that arise during the process of the Merge. This could result in causing the entire Ethereum network to go down and developers may need to restart the network.
Even if for a short time the Ethereum Merge sees any issues, this could end up affecting the blockchain’s reputation and cause bearishness among investors. In turn, this could cause massive drops to the price of Ethereum which has been steadily trading at around $1,700 at the time of writing.
Another issue that investors need to look out for is to avoid becoming victims of ‘replay attacks.’ These attacks usually involve in hackers taking advantage of the hard fork that happens during the Merge to replicate a transaction from the PoW in the PoS fork.
Replay attacks ⚠️
How would a replay attack work?
If you send 100 ETHPoW on the POW chain from your wallet to a friend, then your friend could broadcast the same transaction in the POS chain and send himself 100 original ETH to his same wallet
This is dangerous
— olimpio.lens ⚡️ (@OlimpioCrypto) August 11, 2022
Billions Of User Funds
Although most Ethereum developers have assured that the Merge transition will most likely be a success and happen smoothly, it doesn’t take away from the fact that there are concerns over the billions of dollars worth of funds in Ethereum.
With Ethereum being the second biggest cryptocurrency in market cap and a reported $50 billion worth of users Ethereum in d’Apps, a big mistake taking place during the Ethereum Merge may cause massive chaos.
However, co-founder of Ethereum and founder of blockchain company Consensys Joe Lubin assures that nothing will happen to these users’ funds as the Ethereum Merge is not likely to have massive errors, saying “It will be like Apple upgrading your iPhone operating system overnight, and you don’t even know what happened when you get on your machine in the morning.“
Other possible risks that some in the community are worried about with the upcoming Ethereum Merge include the influx of scams using the Merge confusion to their advantage to scam investors as well as the possibility of post-Merge Ethereum becoming less censorship-resistant.
Despite some of these worries however, most people in the community, the Ethereum developers themselves as well as Ethereum co-founder Vitalik Buterin himself have expressed massive optimism for the upcoming merge, saying that the benefits of the Merge will far outweigh the risks or negatives.