The Ethereum blockchain’s planned Merge, an upgrade that changes it from a proof-of-work (PoW) system to a more environmentally friendly proof-of-stake (PoS) mechanism, will have a number of consequences, Citigroup said in a research report Thursday.
These include lower energy intensity, the transition into a deflationary asset and a “potential road map to a more scalable future through sharding,” the bank said.
The Merge, the first of five planned upgrades for the network, may increase transaction speeds by only 10% by reducing block times, according to the report. The upgrade, however, lays the path for the “Surge,” which is the next planned upgrade for the network and promises to bring 100,000 transactions-per-second (TPS) capability to the blockchain, the report added.
The Merge means that block time will drop to 12 seconds from 13, and that could result in a small decrease in fees and an increase in speed, the note said.
Citi says switching from PoW will reduce overall issuance...
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