\u201cIt\u2019s important to remember that initially, the\u00a0Beacon Chain\u00a0shipped separately from\u00a0Mainnet. Ethereum Mainnet \u2013 with all it\u2019s accounts, balances, smart contracts, and blockchain state \u2013 continues to be secured by\u00a0proof-of-work, even while the Beacon Chain runs in parallel using\u00a0proof-of-stake. The approaching Merge is when these two systems finally come together, and proof-of-work is replaced permanently by proof-of-stake.<\/em><\/p>\n \u201cLet\u2019s consider an analogy. Imagine Ethereum is a spaceship that isn\u2019t quite ready for an interstellar voyage. With the Beacon Chain, the community has built a new engine and a hardened hull. After significant testing, it\u2019s almost time to hot-swap the new engine for the old mid-flight. This will merge the new, more efficient engine into the existing ship, ready to put in some serious lightyears and take on the universe.<\/em>\u201c<\/p>\n SBF\u2019s comments were made during an appearance on CNBC\u2019s \u201cSquawk Box\u201d.<\/p>\n According to a report by The Daily Hodl, the FTX CEO had this to say about the Merge:<\/p>\n \u201cI think long term it\u2019s probably going to exciting for the Ethereum community. I think it\u2019s going to allow substantially faster and cheaper processing and transactions\u2026\u00a0I do think that it\u2019s going to be \u2013 as all big transitions are \u2013 a little bit rocky at the beginning. I think there\u2019s going to be some messy activity around when it happens. I think that\u2019s sort of inevitable, both long term and probably even medium term.<\/em>\u201c<\/p>\n He also said:<\/p>\n \u201cI think that first of all, there are going to be some forks of this. As you look at some people who want a proof-of-work (PoW) variant on it, although I think everyone is expecting that the bulk of the activity in transition to be a proof-of-stake Ethereum through this merge. Obviously, there\u2019s going to be a lot of people in the ecosystem that will have to update software that have to start processing the new chain.<\/em> <\/p>\n \u201cMany of those are going to be promptly ready to do it, some of those probably are not. I expect that APIs are going to break in ways that people didn\u2019t quite predict, and there\u2019s going to have to be bug fixes at least on centralized entities\u2026<\/em><\/p>\n \u201cIt\u2019s a big transition, and anytime that happens, especially when it\u2019s just not one company doing it, when it\u2019s an entire decentralized ecosystem and all the decentralized and centralized entities in it try to transition all at once, some people are going to flub the transition and take some time to clean it up.<\/em>\u201c<\/p>\n https:\/\/youtube.com\/watch?v=6AlCRnMkymw%3Ffeature%3Doembed<\/p>\n On August 16, BitMEX Co-Founder (and former CEO) Arthur Hayes published a\u00a0blog post\u00a0(titled \u201cETH-flexive\u201d), in which he talked about the consequences of a successful and a failed Merge event:<\/p>\n \u201cIf the merge is successful, there is a positive reflexive relationship between the price and the amount of currency deflation. Therefore, traders will buy ETH today, knowing that the higher the price goes, the more the network will be used and the more deflationary it will become, driving the price higher, causing the network to be used more, and so on and so forth. This is a virtuous circle for bulls. The ceiling is when all of humanity has an Ethereum wallet address.\u00a0<\/em><\/p>\n \u201cIf the merge is not successful, there will be a negatively reflexive relationship between the price and the amount of currency deflation. Or, to put it another way, there will be a positively reflexive relationship between the price and the amount of currency inflation. Therefore, in this scenario, I believe traders will either go short or choose not to own ETH.<\/em><\/p>\n
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