Payment Giant, VISA Reveals Why Ethereum Merge Will Not Advance Decentralization
Following Ethereum’s transition from the proof-of-work (PoW) to the proof-of-stake (PoS) consensus algorithm, the crypto industry expects a decentralization push. However, one of the leading card payment platforms, VISA, disclosed that the Merge does not mean rapid decentralization will happen.
More Than Just Decentralization
The crypto arm of the card payment services recently released its report “The Merge: What to expect from a new era of Ethereum,” after activating the Merge mainnet mechanism.
The study’s authors, Mert Ozbay and Mustafa Bedawala, from VISA’s cryptocurrency department, revealed what the community should not expect from the Merge activation and why the upgrade is critical to Web3’s growth.
Meanwhile, the authors highlighted why the transition event was a game-changer for Ethereum’s drive to ensure sustainability, zero carbon emission, and resource efficiency. The researchers noted that the Merge is the most impressive switch in the history of blockchain technology.
The transition from the PoW to the PoS signifies the push to reduce carbon footprints and decrease the network’s energy consumption rate by 99.95%. However, talking about decentralization and security, the authors explained that the Merge activation appears to be a double-edged sword for Ethereum in the long term.
Despite having a much lower entry barrier, PoS, according to them, does not mean that the network will get to experience improved decentralization immediately. The VISA report shows that the whale-style control, as shown by the largest miners, might be replaced by the collection of staking entities because the network 32 ETH threshold to become validators is high for its users to attain.
As a result, staking pools will likely gain the upper hand over ETH’s progress due to a large amount of staked Ether by clients.
Significant Developments On The Way
Furthermore, the VISA report also highlighted the scaling prospect of Ethereum, the largest smart contracts platform in the digital asset industry. According to the study, the move to the PoS consensus protocol hasn’t increased the network’s throughput.
With this in mind, the crypto experts at VISA are closely monitoring the next development phase in the Ethereum 2.0 roadmap. They intend to observe how the network can play a critical role in the international cross-border payment ecosystem.
The experts intend to observe the development of scalability and security features in ETH 2.0 in the next few years to determine how it will shape the network’s role in the global payment system.
As one of the most critical events in the history of Ethereum, the Merge places the network as the first in the industry to transition to PoS from the PoW consensus protocol.
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