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Will the latest Ethereum upgrade reduce cost of minting NFTs, increase blockchain's transaction speed? Find out here

Will the latest Ethereum upgrade reduce cost of minting NFTs, increase blockchain's transaction speed? Find out here

Many in the crypto community believe that the Ethereum merge might reduce gas fees, make transactions faster on the blockchain network, bring the cost of minting an NFT (non fungible token) down, and make the network more efficient. But this might actually not be true.

Ethereum network is going to change from Proof of Work to Proof of Stake consensus mechanism Ethereum network is going to change from Proof of Work to Proof of Stake consensus mechanism

The Ethereum network is in the final stages of transitioning its consensus mechanism from the Proof of Work (PoW) algorithm to the Proof of Stake (PoS) algorithm and this event is being dubbed ‘The Merge’ by the crypto community. This upgrade is planned to make the Ethereum network more energy efficient. Many in the crypto community believe that this event might reduce gas fees, make transactions faster on the blockchain network, bring the cost of minting an NFT (non fungible token) down, and make the network more efficient. But this might actually not be true.

What will change after the merge?

Blockchain networks depend on validators (or cryptocurrency miners) to validate every transaction that occurs on the blockchain. These miners run complex algorithms on devices with extremely high computing power to validate these transactions. This process takes a lot of energy.

After the Ethereum network’s move to the Proof of Stake consensus mechanism, this energy-consuming process will be eliminated.

Will the gas fees of Ethereum go down?

Gas fees is the cost incurred to complete transactions on the Ethereum network. ‘The Merge’ will substantially modify any factors that directly affect network capacity or throughput. This has been confirmed by the Ethereum Foundation. Therefore it is highly unlikely that the gas fees would reduce.

Will transactions on Ethereum get faster?

The Ethereum core developers have consistently refuted these assertions. There won't be any improvement in transaction speeds. Because the decentralised application or program using the blockchain determines the speed of the transaction rather than the network itself.

Will NFT minting become cheaper?

Transaction fees are charged on the Ethereum network to mint an NFT. Turns out, that ‘the Merge’ will have no impact on the NFT minting fees. According to a blog posted by an Ethereum developer, the move to Proof of Stake has nothing to do with transaction fees.

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Published on: Aug 24, 2022, 3:06 PM IST
Posted by: aakanksha chaturvedi, Aug 24, 2022, 3:00 PM IST