The price of Ethereum (ETH 1.82%) has been surging in recent weeks, in part due to the excitement surrounding the network's upcoming update, "The Merge."
Last month, Ethereum developers announced that the update was tentatively scheduled for mid-September. Now, the official kick-off date is slated for Sept. 6, and The Merge should be completed sometime between Sept. 10-20.
This is an exciting moment for crypto investors, and there are a few no-brainer reasons to consider buying Ethereum ahead of The Merge.
1. Ethereum is already one of the strongest networks
The Merge aside, Ethereum is already one of the biggest players in the crypto space. It's the second-most popular cryptocurrency behind Bitcoin (BTC 2.09%), and it's the most widely used network for decentralized applications (dApps) such as NFT marketplaces and decentralized finance (DeFi) projects.
In other words, there's a lot to like about Ethereum already, and it has more real-world utility than many other cryptocurrencies. While nobody can say for certain how it will perform over time, Ethereum has a better chance of seeing long-term growth -- and The Merge will only strengthen it.
2. The Merge will vastly improve its energy efficiency
At the moment, Ethereum still uses a proof of work (PoW) mining protocol, which is time- and energy-intensive. However, The Merge will move Ethereum to a proof of stake (PoS) protocol, which is considerably more efficient.
In fact, after the update, the network is expected to require around 99.95% less energy than under its current PoW protocol. That can give it a major advantage over Bitcoin, which has been widely criticized for its energy usage.
3. It will be able to better compete with smaller networks
Moving to a PoS system could help expand Ethereum's capabilities, making it easier to compete with newer blockchains.
Many smaller networks already use PoS, which gives them an advantage over larger cryptocurrencies like Bitcoin and Ethereum that still use PoW. Once Ethereum completes its upgrade, though, it will be on a more level playing field with networks like Solana and Cardano.
Risks to consider before you buy
While The Merge is a strong step in the right direction for Ethereum, there are still risks involved.
Despite its advantages, Ethereum is still a speculative investment. It could be the strongest blockchain in the world, but if crypto and decentralized networks never become mainstream with the public, it will be tough for Ethereum to thrive over the long run. And at this point, it's too early to say exactly how the crypto market will fare in the future.
Also, it's possible that Ethereum could see significant volatility as it rolls out The Merge. Developers have already found a bug related to the upcoming upgrade, and although they were able to quickly resolve the issue, there's always a possibility for more hiccups as we get closer to the release date.
Ethereum also has a long history of delaying updates. The Merge was originally planned for June before getting pushed to August, then finally delayed until September. While it is better to hold off on an update than to rush and risk serious issues, all of these delays could cause investors to lose confidence in Ethereum -- not to mention give competing cryptocurrencies more time to catch up.
Ethereum isn't perfect, but this update should make it a stronger investment. If you're willing to take on more risk for the chance of potentially earning substantial rewards, now may be the right time to invest.