Cryptocurrency is a complex world and ETH is the second-largest by market cap. So, when news broke that there are plans to merge ETH with ERC-20s, it may have caused confusion for some users. We’ve put together this guide to give you an idea of what could happen to your Ethereum wallet as well as how it will affect NFTs.
What is the Merge?
The Ethereum network is the largest blockchain in the world. It's a decentralized computing platform that uses smart contracts to allow people to exchange money and information in a secure way. The Ethereum blockchain stores all transactions, including those of ERC20 tokens.
An ERC20 token is created through an Ethereum smart contract, which is code that runs on the blockchain whenever someone uses an NFT or other NFT-related product to purchase something with ETH (or any other cryptocurrency). This code defines certain rules for how assets are purchased, transferred and exchanged between individuals on the Ethereum blockchain: **what happens if someone doesn't follow these rules?**
The Ethereum Merge is a new way to speed up the Ethereum network, which is currently one of the biggest blockchain platforms for decentralized applications (DApps).
Ethereum Merge will allow for faster and more efficient transactions, lower costs, increased security and overall usability on the Ethereum Network.
How will this affect NFTs in general?
There are a few things that are important to know about the Ethereum merge and how it will affect your NFTs.
- The Ethereum merge itself will not affect you or your NFTs in any way. You don't have to do anything, and your NFTs should work normally going forward.
- Neither the price nor value of your NFTs will change because of this announcement. Your NFTs have already appreciated in value since they were created, and they will continue to do so no matter what happens with Etheruem's price or network stability.
- You can still use all the same functionality with your NFT as before, including trading them on exchanges or gifting them via social media platforms like Reddit or Twitter.
What Happens if I Have ETH Under Contract?
- What Happens if I Have ETH Under Contract?
If you have ETH under contract, the Ethereum Merge will not affect that. The Ethereum blockchain will continue to run as usual and your NFTs will be unaffected. However, you may want to consider transferring your ETH into a new contract soon after the Ethereum Merge or before it occurs because:
- The old version of the Ethereum blockchain has been deprecated by its developers and will no longer receive updates or bug fixes for security issues.
- If you don't transfer your funds before hand, they're at risk of being lost if someone takes advantage of an exploit in the old version of Ethereum's codebase before it gets patched up.
What Happens if I have ETH Outside of a Contract?
If you have ETH outside of a contract, it will be automatically converted to ERC-1155. This will happen as soon as the merge is complete. You won't be able to trade ETH for ERC-1155 for a short period of time after this happens, but you can still trade your newly created ERC-1155 tokens for ETH after everything has been finalized.
How Long Will The Merge Last?
The merge will last for a few days, and it will be complete on May 29th. During the merge, your NFTs will still appear in your wallet as usual. However, you won't be able to move them or transfer them out of your account until the merge is complete. If you attempt to do so before then, the transactions will fail and you'll lose your tokens!
We recommend that users wait until after May 29th before making any transfers of these NFTs to ensure their safety during this process.
What's Next For ETH?
ETH will continue to be used as a currency.
The Ethereum network, like many others, is based on the proof-of-work (PoW) consensus algorithm. In order for someone to add a transaction to the blockchain, they must execute a complex calculation that requires significant processing power and time; this process is known as mining. While mining may sound like an antiquated idea from an era of Commodore 64s and floppy disks, it’s still how most cryptocurrencies work today. ETH miners are rewarded with newly minted ETH for their efforts in keeping the network secure and running smoothly.
In addition to using ETH as currency on exchanges or when trading with other people online or at meetups/events (which we encourage!), you can also hold onto your own crypto coins if you want to reap any possible gains in value over time — just keep in mind there are some risks associated with investing money into cryptocurrencies that aren’t guaranteed by any financial institution or government entity around the world (yet).
If you ever decide that you do want to sell off some of your tokens instead of holding onto them forever until they become worth millions of dollars each (or whatever), then there are plenty of ways for sellers like us at ERC721x who know what they're doing--and have been doing this job since before even bitcoin first launched its own platform back in 2009--to help make sure everything goes smoothly while protecting both parties involved financially against any unforeseen issues arising from unexpected circumstances down the line."
We’re excited to see how this impacts NFTs in the future and what new features they will bring out.