Perhaps the most anticipated event in the cryptosphere, Ethereum’s transition to Proof-of-Stake (PoS) is fast approaching. While the highly anticipated transition gives Ethereum users plenty to celebrate, it could also leave some people vulnerable to hacks, attacks, and penalties.
A few days ago, Ethereum announced that the Bellatrix update was scheduled for the morning of September 6th. Bellatrix is the first of two critical updates en route to The Merge, the second being the Paris update, which will eventually rock the network. to the proof-of-stake (PoS) consensus mechanism.
Simply put, the transition from Ethereum to PoS, which is perhaps the most anticipated event in the cryptosphere, is fast approaching. While the highly anticipated transition gives Ethereum users plenty to celebrate, it could also leave some people vulnerable to hacks, attacks, and penalties. With that in mind, the following article will unpack some tips to help you prepare for The Merge.
Users are not required to do anything during the transition
According to an official Ethereum blog post, anyone holding ETH on an exchange or in a self-service wallet will NOT need to do anything to prepare for The Merge. Most major crypto exchanges, such as Binance and Coinbase, will ensure user funds remain safe in their wallets during the upgrade. If an app, exchange, or wallet offers additional instructions, make sure those instructions are from verified sources.
Also, don’t panic if you find your ETH frozen for a few hours before and after the merge. Indeed, most major exchanges will implement a temporary pause on borrowing, depositing, and withdrawing ETH.
What you need to know in case of a hard fork
There are several rumors of a potential hard fork after the Ethereum merger. Indeed, the transition to PoS excludes miners from a source of income and renders their IT equipment useless. Thus, several powerful mining entities have suggested continuing the proof-of-work network after the transition to PoS, which has led to a fork in the blockchain.
If this happens, it will cause PoWETH to be created. Although the possibilities of a hard fork are slim, they cannot be ruled out. If this happens, scammers and hackers will take advantage to deceive unsuspecting investors and traders.
Bad actors can ask ETH holders to buy PoWETH or transfer funds to a random wallet address to “complete the upgrade” and disappear after receiving the funds. Most platforms will use snapshots of user holdings to allocate an equal amount of PoWETH in the event of a hard fork. They will also offer official instructions, if any, in case an unofficial fork takes place.
Guidelines for knots
After the merge, the nodes will need to run an execution layer in addition to their consensus layer clients. Ethereum chose this multi-layered setup for security reasons. Failure to comply with the new guidelines could result in heavier penalties.
The Ethereum blog post announcing the Bellatrix upgrade listed the client versions that will support The Merge on the Ethereum mainnet. The post also provides additional resources on why the multi-tier setup was chosen and a guide to switching customers.