What’s Going on After The Merge, Anyway?

On September 15, which is eight days from today, the Ethereum Merge was finished. One day in cryptocurrency is equivalent to one year on earth, according to a proverb in the Chinese cryptocurrency scene, implying that anything can happen in the world of blockchain at the speed of light. So what happens after day 8 to Ethereum and its hard forks?

The quick response is “no good”

Let’s first examine Ethereum. At 2:42 PM (UTC+8), the most complex upgrade in cryptocurrency history and Ethereum’s most recent high were both finished. In honor of the Merge, the price was raised to $1,653. From there, it started to gently retrace its steps, and this was only the lull before the storm. The same night, Ethereum dropped 5% in 30 minutes abruptly and without any warning, but bitcoin and the major stock indices merely experienced little retracement. We didn’t receive any news at the time explaining why it unexpectedly fell. A few days later, on September 20, the U.S. Securities and Exchange Commission (SEC) made the claim in a legal complaint against cryptocurrency influencer Ian Balina that it thinks the U.S. government has jurisdiction over all Ethereum transactions. Aside from this announcement, the Ethereum blockchain is operating without a hitch or any issues since integrating. At the time of writing, Ethereum had dropped from $1,653 to $1,334 a total of 19%.

As horrible as what occurred to Ethereum may appear, just wait until you see how these hard-forked networks perform. There are now two widely used hard forks: Ethereum Fair and ETHPoW (ETHW) (ETF). These offshoot blockchains have been created with the intention of keeping the earlier Ethereum state, including its transaction history and all asset records, as if the Merge had never taken place. To survive, all Ethereum miners are forced to move to proof-of-work (PoW) blockchains. But it was all over in a split second.

The network difficulty is a metric for how challenging mining a block is. The network will be more resistant to assaults if the network difficulty is high since it will require more processing power to mine the same amount of blocks. Hashrate, a measure of computational power and a crucial security indicator, is generated from the difficulty of mining and the number of miners. In other words, as the number of miners rises, the security of the network is increased and vice versa. Even while it gets easier to mine the block if miners stop, the hashrate lowers if this happens because no one wants to utilize a blockchain that lacks security. Both hard-forked chains of Ethereum experienced this.

There are several reasons why miners choose to stop working, but profit is always the main factor. Why would someone still mine if it is not lucrative to do so? Both ETHW and ETHF’s hashrates had fallen more than 50% from their first-day peaks and were still moving downward. The worst is yet to come for ETHW; as soon as the chain launched, a smart contract hack known as the “replay assault” occurred. 200 wrapped ether have been successfully exploited by the attacker (WETH). Even though the hard fork network only values these spinoff WETHs at about $1,200 each, the episode inflicted a lot of damage to ETHW’s reputation. Later dropped from $8 to below $4, ETHW is now trading at about $6. Prior to this, ETHW also saw a significant dump on September 16. On the other hand, ETF has relatively limited adoption since miners favor ETHW. Since the massive selloff on September 20th, its price has been fluctuating between $2.70 and $2.90.

I don’t see any benefit to adopting these spinoff Ethereum networks beyond the mining goal. Without dApp or smart contract developers, a blockchain loses its original intent, especially if it is an Ethereum-based blockchain with smart contract capabilities.

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