Through the Merge and beyond, has anything changed? | by Ronwriter | Coinmonks | Oct, 2022 - Rvpg media

Through the Merge and beyond, has anything changed? | by Ronwriter | Coinmonks | Oct, 2022

Through the Merge and beyond, has anything changed?


“Justin Drake, a researcher at the Ethereum foundation, told CoinDesk he predicted that the Merge — by shifting the second-largest blockchain network to a more efficient mechanism — would decrease global energy use by 0.2%.”

Although impressive, I do not think that a more “efficient mechanism” was supposed to be the crowning achievement of the Merge.

Reducing the carbon footprint of the number two cryptocurrency is excellent — even though former Ether miners will disagree — but what has the Merge accomplished in its successful transition?

The short answer is not a lot, but the Merge is only the first step in Eth2 five-step journey.

Vitalik Buterin (Ethereum’s co-founder) says the gradual process will bring the smart contract blockchain to a high block frequency with much-increased block size and the ability to process thousands of transactions per second. He says it will be accomplished without sacrificing the trustless component of cryptocurrency.

The Shangai upgrade is next in Ethererum’s journey. It will allow validators to withdraw a portion of their staked ether.

The Surge will implement sharding, thus increasing the storage and accessing of data scalability on the blockchain.

The Verge is expected to drastically reduce Ethereum’s reliance on nodes (the current method of data storage). It will introduce so-called “verkle trees

, “ allowing much smaller proof sizes.

The Purge will reduce the space required to store ETH on a hard drive. It will eliminate the use of nodes.

The Splurge (the fifth and final step) will ensure the network runs according to plan.

These remaining steps will take several years to implement.

How does the Merge change the way the SEC looks at Ethereum?

Gary Gensler (SEC chair) has made comments referring to Ethereum’s move to a proof-of-stake as a security and thus bound to Security regulations.

In Mr. Gensler’s mind, the proof-of-stake squarely places Ethereum in the security bracket.

According to The Wall Street Journal, “SEC chairman Gary Gensler reportedly said that cryptocurrencies and intermediaries that allow holders to ‘stake’ their crypto might define it as a security under the Howey test. From the coin’s perspective […] that’s another indicia that under the Howey test, the investing public is anticipating profits based on the efforts of others.”

What does it mean for everyday people?

Crypto regulations are inevitable. The government’s decision-making process is a slow and time-consuming, which means it will (eventually) happen.

The designation of a crypto (currency or otherwise) will determine the amount of tax you will pay. Generally, securities will be taxed at 0%, 15%, or 20% when your investment is held over one year and at your ordinary tax rate under a year.

Commodities will be taxed on capital gains as either long-term (capped at 15%) or short-term (your ordinary tax rate).

In the cryptoverse, you will have securities and commodities depending on how the regulations are finally shakedown.

So, make your investments (wisely), receive your gains on investments (happily), and pay the tax man (accordingly).

The cryptoverse is for you. Follow along as I learn; maybe you will learn; and perhaps, we can explore the cryptoverse.

Disclaimer: I am an avid student of all things crypto. The cryptoverse caught my attention when COVID-19 captured the world and locked down the global economy. Since then, I have dedicated a portion of my time to learning about this currency — the currency of the future — and international business. As a writer, I have determined to journal my discoveries. I have chosen to write them in short, bite-sized articles to help anyone interested in learning about this space. These articles are not written in cryptoese or investments but are easy-to-understand articles. I am not offering advice, simply the information I discovered on my unexpected journey into the cryptoverse. There could be something for the seasoned investor to glean from reading, but my focus is on the crypto-curious.

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