The Ethereum community is awaiting the Merge with bated breath. But there are a few things to watch out for, especially if you’re a beginner in crypto.
Ethereum’s Merge is looming, with its go-live date set for September 15th 2022. It’s expected that the upgrades, which include transforming the network from a miner-secured blockchain into a validator-secured blockchain, will be the most meaningful event in its lifetime.
However, with all the overwhelming hype, it can be difficult to make sound investment decisions. In this article, we’ll provide a guide for surviving the Ethereum Merge.
How to survive the Ethereum Merge
Be vigilant to avoid scams
According to NBC News, scammers stole $14 billion worth of crypto in 2021, which is a 79% increase from 2020.
Unfortunately, crypto-related crime is on the rise, so it’s extremely important that you’re vigilant when you’re making purchases.
As the buzz around the merge reaches fever-pitch, expect opportunistic scammers to step out of the woodwork.
Look for licensed exchanges to ensure that your personal details are safe. For instance, Xcoins was one of the first cryptocurrency exchanges to be regulated in Malta, having received a Class 3 Virtual Financial Asset (VFA) License from the Malta Financial Services Authority (MFSA).
It’s equally important to be mindful when you’re discussing your crypto investments with others online, including on social media and in forums. Never share your private keys with anyone, and be cautious about publicly sharing your purchases.
Don’t use leverage
News outlets and social media are buzzing about the possibility of investing in Ethereum, which could potentially bring high returns after the Merge. However, good returns are never guaranteed and it could take some time before they appear.
This is why it’s crucial to purchase crypto according to your risk tolerance and financial situation, especially within the current challenging financial climate. Only invest money that you have, and can afford to lose if the market turns.
Store your assets safely
Whether you’re a beginner in crypto, or a long-term enthusiast, storing your tokens safely should always be a priority. There are two main types of wallet that you can use:
Hot wallets, such as desktop wallets, online wallets and exchanges.
Cold wallets, such as paper and hardware wallets.
You should choose the type of wallet that works for you, and suits your crypto needs the best. For example, if you plan to hold your Ethereum for the long haul, a hardware wallet may be the safest option to ensure that it’s less exposed to online scams.
What’s most important is that you make a decision on how you want to store your crypto as soon as possible, to ensure that your assets are safe and properly custodied. You can read our guide on hot wallets vs cold wallets to help you make your decision.
Be prepared for unexpected outcomes
In an ideal scenario, the Merge will go ahead without a hitch, and everyone will be on board with Ethereum’s new structure. Unfortunately, like most things, upgrades don’t always go according to plan.
Blockchain developers usually push upgrades through hard forks. A hard fork, for example the London Hard Fork in 2021, split the protocol into two. One blockchain gets upgraded, while the other remains as it was before. The expectation is that participants will adopt the new iteration of the blockchain, and the previous one will gradually disappear.
However, if developers have differing perspectives on the upgrade, it can result in both ecosystems surviving independently of one another. Ethereum’s DAO Fork in 2017 is a notable example of this which led to the formation of Ethereum Classic.
The objective is for there to be consensus when there’s a significant upgrade. But that isn’t guaranteed, so there are a few things to be aware of, just in case.
If Ethereum does split, its state won’t transfer with it. As a result, the stablecoins and DeFi applications on the “old” iteration are likely to fail.
Although your private key will work on both chains, you should be careful about approving transactions on a fork chain. Miners may be able to duplicate your transactions on Ethereum, so don’t buy or sell your assets unless you’ve done thorough checks.
The Merge could lead to the formation of two separate Ethereum protocols.
Should I buy Ethereum before the merge?
The Merge has provided a great opportunity to invest in Ethereum’s future. This is the biggest upgrade in blockchain history.
That said, whenever you’re purchasing any crypto, make sure that you’re aware of potential risks so your decisions are well-informed.
If you’re thinking of stocking up on Ethereum, you can do so with Xcoins. You’ll pay 0% in processing fees on your first purchase, and there’s no verification when you buy up to $150 worth of crypto. Sign up now to benefit from buying crypto instantly and securely.
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