Ethereum (ETH) has been performing very well in recent weeks and this is partly due to the upcoming Ethereum upgrade
which goes by the name of "the Merge". The long-awaited upgrade that will finally be completed in September is having a major impact on Ethereum.
The Merge has also been called the most significant upgrade in the history of Ethereum. In fact, it marks the end of Proof-of-Work (PoW) for the Ethereum blockchain and the beginning of Proof-of-Stake (PoS). One of the major benefits of this transition to PoS is a much less energy-intensive blockchain, reducing the environmental impact.
However, there are all sorts of other rumors circulating about the Merge that are not true. Here are the 4 biggest misconceptions about the Ethereum Merge.
Misconception 1: Ethereum gas fees will decrease after The Merge
That Ethereum's upcoming upgrade will reduce gas fees (transaction costs) is one of the biggest misconceptions going around among investors. While a reduction in transaction fees is at the top of every investor's wish list, The Merge is a change of consensus mechanism that will change the Ethereum blockchain from PoW to proof-of-stake (PoS).
Instead, lowering gas fees in Ethereum will require working to expand network capacity and throughput. Ethereum's developer community does currently work on a plan to make transactions cheaper.
Misconception 2: Ethereum transactions will be faster after The Merge
It is safe to assume that Ethereum transactions will not be noticeably faster. However, there is a grain of truth in this rumor, as Ethereum can publish a block every 12 seconds after the upgrade, which is roughly every 13.3 seconds on the current mainnet.
Although Ethereum developers believe that the transition to PoS will allow for a 10% increase in block production, the small improvement will go unnoticed by users. Transactions already typically take no more than a few seconds on Ethereum,
Misconception 3: The Merge will result in downtime of the Ethereum blockchain
Contrary to the misconceptions that predict positive outcomes for Ethereum from The Merge, a popular rumor suggests that the planned upgrade will temporarily take down the Ethereum blockchain.
Developers do not expect downtime as blocks transition from PoW to PoS.
Misconception 4: Investors will be able to get their staked ETH back after the Merge
Staked ETH (stETH), a cryptocurrency backed 1:1 by Ether (ETH)
, is currently locked up on the Beacon Chain. While users would like to be able to withdraw their stETH holdings, the developer community has confirmed that the upgrade will not allow for this change.
Retiring stETH holdings will be made available during the next major upgrade after The Merge, known as the Shanghai upgrade. As a result, tokens will remain locked and illiquid for at least 6-12 months after The Merge.