Prominent Businessman Wasan Bodhipimpanon, Founder Of Benz Thonglor Group, Succumbed To Liver Cancer At 76 On Wednesday.
The Bodhipimpanon family announced that his funeral service would start at 4pm on Thursday at Wat That Thong in Bangkok’s Watthana district.
Wasan was well-known among Thailand’s business landscape as one of the few entrepreneurs who survived the “Tom Yum Kung” financial crisis in 1997 and managed to revive his car dealership back to life.
He founded the company in 1977 and built it into one of the top Mercedes-Benz dealerships in the country.
In an interview, Wasan once said it took him 15 years to get Benz Thonglor Group back on its feet after the Tom Yum Kung crisis and that he had kept his promise in 1997 to retain almost 500 of his staff until the crisis passed.
One of his notable tactics was to turn some car showrooms into Som Tum (green papaya salad) restaurants, and attract customers by giving out free dishes on their first visit.
He was also well-known for being the first to open “Talad Nad Khon Khoei Ruay” (flea market of the former rich), which encouraged entrepreneurs affected by the financial crisis to sell their valuables and collectibles at cheap prices to strengthen liquidity for their businesses.
Talad Nad Khon Khoei Ruay is still an attraction in Thailand today although its meaning and purpose have slightly changed, as now anyone is welcome to sell their valuables there.
Post Today, NewsClear Acquisition Still Under Consideration: Nation Group
BY LINE : THE NATION
THU, SEPTEMBER 08, 2022
Nation Group Told The Stock Exchange Of Thailand (SET) On Wednesday That The Company’s Move To Acquire Post Today And NewsClear Online Media From Bangkok Post Plc Is Still Pending A Decision By The Group’s Board Of Directors.
In a statement released on Wednesday, Nation Group Thailand Plc said the deal, which was announced on September 5 covering the acquisition of licences and services of Post Today and NewsClear online media at a price of 58.85 million baht, is not finalised yet.
The company said it released this statement to clear up any misunderstanding that the announcement might have caused among investors and the general public.
“The acquisition of Post Today and NewsClear is still under the consideration of Nation Group’s broad of directors. The assets of both online media are also subject to inspection before being transferred to Nation Group, upon which the payment will be made. This is expected to take place by September 30,” said the statement.
The company will release an official announcement once the deal is finalised.
“We have been carrying out this acquisition deal in accordance with related legal requirements. We will notify the Stock Exchange of Thailand immediately of any updates,” said the statement.
Nation Group also said the deal is within the jurisdiction of the board of directors as the value does not exceed 100 million baht.
DTP Global REITs Management Launches DTPHREIT, Investing THB4 Billion In MQDC Hotels With Buy-Back Obligation
BY LINE : THE NATION
WED, SEPTEMBER 07, 2022
September 7, 2022, Bangkok – DTP Global REITs Management (DTPRM), A REIT Management Company Under DTGO Prosperous (DTP), Has Launched DTP Hospitality Real Estate Investment Trust (DTPHREIT), A Hotel And Leasehold REIT To Invest Up To 4.107 Billion Baht In MQDC’s High-Potential Hotel Business, With A Condition That The Former Owner Agrees To Buy Back The Assets At The End Of The Investment Period.
Ms. Wanida Suksuwan, Managing Director of DTP Global REITs Management (DTPRM), said DTPHREIT will invest in the following high-potential MQDC hotel properties and serviced apartments: 1. Waldorf Astoria Bangkok hotel subleasehold and leasehold rights; 2. Magnolias Ratchadamri Boulevard (MRB) serviced apartments including sublease rights; 3. U Khao Yai hotel. The REIT will not exceed 4.107 billion baht in value.
DTPHREIT is a buy-back REIT with an agreement to sell the real estate back to the original owner at the close of the 3rd year from the date it invests. The former owner has an obligation to lease and manage the property ensuring the REIT’s stable income. The annual rental rate for both projects is about 217.49 million baht and a security deposit equal to 3 months of the rental fee assures DTPHREIT a stable income.
“With stable income and consistent returns from letting, the property owner pays a fixed rent so DTPHREIT can pay its unitholders the fixed-rate return of 7% per annum for 3 years. The owner also agrees to buy back the assets at the price invested by the REIT at the end of the 3rd year after the REIT invests, so unitholders will receive their full investment back at the end of the 3rd year,” said Ms. Suksuwan.
The REIT is set to offer investment units to institutional investors and/or ultra-high net worth investors through two underwriters, Yuanta Securities (Thailand) and DAO Securities (Thailand). The trust is set to be registered in late September or early October with Krung Thai Asset Management as a trustee.
Mr. Visit Malaisirirat, CEO of MQDC, the property owner, said that the assets sold to DTPHREIT have very high potential, both in location and quality. For the fundraising purpose, he added that it is for supporting further investment, pay off debt, and supply working capital.
“After the recent COVID-19 outbreak has eased gradually, many countries relaxed their safeguards and opened up for travel, more foreign tourists are now arriving fast, especially here in Thailand. The hotel sector is recovering fast too. Asset value has recovered as well. After 3 years, the company will therefore definitely be ready to buy back the assets. The specific assets sold to DTPHREIT are currently recovering very fast. In the recent COVID-19 pandemic, MQDC kept all its hotel staff, without a single layoff, ensuring the properties are ready to open and enabling normal operations as soon as the country opens.
“The easing of the situation and the improved trend make us confident that tourism will return to drive the country’s economy to grow again. Various tourism-related and service businesses will recover quickly. The hotels and serviced apartments sold to the REIT in a top location, close to city-center tourist attractions and managed by an internationally renowned team, will benefit directly, enabling the group to manage and execute its agreement with the REIT, both in regular payments and the repurchase under the agreement,” Mr. Malaisirirat said.
BEM Quotation Beats ITD In Bid To Operate And Build Orange Line
THU, SEPTEMBER 08, 2022
Bangkok Expressway And Metro (BEM) Has Offered Higher Benefits And The Lowest Price Of The Two Remaining Bidders For The Orange Line Mass Transit Project, It Was Disclosed On Thursday.
BEM quoted 78.2 billion baht compared to 102.6 billion baht by Italian-Thai Development Group (ITD).
The quoted prices and construction costs would be subsidised by the Mass Rapid Transit Authority of Thailand (MRTA).
The MRTA on Wednesday opened the sealed envelopes containing proposals regarding investments and benefits offered by the bidders.
Bidding for the Orange Line project is going ahead despite an ongoing legal battle involving Skytrain operator Bangkok Mass Transit System (BTSC) and the MRTA, which had cancelled the first round of bidding.
BTSC had participated in the first round but opted out of the second round of bidding.
BTSC filed a lawsuit against the cancellation of the first round of bidding and won the case. It also filed a lawsuit against the second round, but the Administrative Court has yet to make a ruling. The court recently rejected BTSC’s request for an injunction to suspend the second round.
The 35.9km-long Orange Line is divided into eastern and western sections. Construction of the 22.5km-long eastern section from Thailand Cultural Centre to Minburi, with 10 underground stations and seven elevated stations, is 90 per cent complete.
The western section stretches from Thailand Cultural Centre to Bang Khunnon – a length of 13.4km, with 11 underground stations.
The bid winner would be required to sign a private-public partnership contract to operate the entire route after building the western section.
NBTC Under Fire For Dragging Its Feet On DTAC-True Merger
THU, SEPTEMBER 08, 2022
The Telecom Watchdog Could Be Accused Of Dereliction Of Duty For Failing To Intervene In A Mega-Merger Between Thailand’s Second- And Third-Largest Mobile Network Operators, A Legal Expert Has Warned.
Prinya Thaewanarumitkul, a law professor at Thammasat University, said the National Broadcasting and Telecommunications Commission (NBTC) should perform its legal duty as the regulatory agency.
He said the NBTC has the duty to prevent a monopoly in the market and therefore it should take action when the telecom market would have only two players following the planned merger between DTAC and True.
Prinya said he was puzzled that the NBTC had recently consulted the Council of State, the government’s legal advisory agency, regarding the matter.
“The NBTC has the authority to decide whether to approve a merger that would control more than 50 per cent of the market,” the law professor said.
He was speaking at a panel discussion at Thammasat University’s Tha Phrachan campus jointly organised by the Law Faculty and Thailand’s Consumers Council on Wednesday.
Assoc Prof Narongdech Srukhosit, from Chulalongkorn University’s Faculty of Law, said at the event that the NBTC should take into account public interest when making its decision regarding the planned mega-merger, as telecom frequencies are a limited national resource.
“The NBTC has to think of the public interest, particularly the fact that there would be only two telecom service providers after this merger,” he said.
Meanwhile, Chatra Kamsaeng, director of 101 PUB, which describes itself as a “public policy think tank”, said he wondered why the NBTC was seeking advice from the Council of State even after the Administrative Court had ruled that it has the legal power to decide on the matter.
“There must be some reason that the law would be interpreted to benefit certain groups of people at the cost of public interest,” he said.
Sirikanya Tansakun, an MP from the opposition Move Forward Party, told the panel discussion that the NBTC appeared to have no confidence in its legal authority and no courage in exercising its power.
“Thai society has to realise why the NBTC’s executive board still seeks advice from the Council of State even after the Administrative Court had ruled that it has legal power to make an order about business mergers,” Sirikanya said.
She sits on the House tasked with studying impacts of telecom business mergers.
Clean Energy, Digital Tech Will Fuel Economic Recovery: Energy Minister
BY LINE : THE NATION
THU, SEPTEMBER 08, 2022
Developments In Green Energy And Digital Technologies Will Play A Crucial Role In Thailand’s Economic Recovery, Energy Minister Supattanapong Punmeechaow Said On Thursday.
He was speaking at a Thai News Network seminar titled “Recovery and Moving on of Thai Economics – the Great Reset”.
Supattanapong said the economy was gradually improving after being hit by recession because of three years of the Covid-19 pandemic, which has been aggravated by the war in Ukraine.
The pandemic and the conflict have led to increasing food and energy prices, resulting in rising inflation, but the Thai economy was now on the path to recovery, he said, citing the number of non-performing loans in banks that have “dropped from some 12-14 million to just 3 million”.
Supattanapong said revenue figures were also improving along with other economic indicators.
According to him, international agencies have given Thailand a credit rating that is the same as before the Covid pandemic, while Thai banks are still enjoying stability.
“So, I would like to assure the people that the situation is improving and the government will handle the remaining issues of the crisis,” the energy minister promised.
He said the economic situation might not go back to pre-Covid levels soon, but Thailand’s situation was at least much better than those of neighbouring countries.
Supattanapong also said Thailand had been developing green energy technologies after General Prayut Chan-o-cha announced at the 2021 United Nations Climate Change Conference that Thailand would become carbon neutral – a balance between emitting carbon and absorbing carbon from the atmosphere – by 2050.
With Prayut’s commitment, Supattnapong said, Thailand became the only Asean nation that started working toward the carbon-neutrality goal.
According to the minister, Thailand has become the only Asean country to promote the use of battery electric vehicles (BEVs), so manufacturers could use Thailand as a hub for making BEVs.
“We are not helping importers of BEVs, as several critics claim. The importers must build factories to manufacture BEVs to be eligible for government subsidies, Supattanapong made it clear.
He said the programme would ensure that at least five brands manufacture BEVs in Thailand.
This could lead to development of digital technologies and would create new types of SMEs, he said hopefully.
There would also be investments and developments of other technologies related to carbon neutrality, including the goal to turn Thailand into a hub for making hydrogen energy, Supattanapong said.
Thais have also become a digital society by using various apps, such as Krung Thai Bank’s Paotang app to buy digital lottery, he pointed out.
Furthermore, new SMEs based on digital platforms will be created, the energy minister said, adding that leading foreign investors are now interested in investments in cloud computing services, cloud servers, artificial intelligence, and data centres.
He said foreign investors, who are keen to invest in these digital technologies, will soon apply to the Board of Investment for tax incentives.
The country also possesses logistics infrastructure ready to serve investors, and many want to transfer their manufacturing bases to Thailand in a move to use the kingdom as a gateway for their products, Supattanapong said.
He cited the figure of 900 billion baht of investments in the Eastern Economic Corridor as proof, saying foreign investors have taken note of Thailand as a country ripe for investment under a Bio-Circular Green Economy.
“The government has been doing its best and I would like the public to have confidence that even when we are in crisis, success can be achieved with cooperation from all,” Supattanapong concluded.
The Baht Opened At 36.52 To The US Dollar On Thursday, Strengthening From Wednesday’s Close Of 36.70.
The currency is expected to move between 36.40 and 36.70 during the day, Krungthai Bank market strategist Poon Panichpibool predicted.
He said the baht was likely to be highly volatile, especially during forthcoming results of a key European Central Bank (ECB) meeting, which comes at the same time as the US Federal Reserve chairman’s press conference.
However, Poon said the market had already acknowledged the likelihood that the Fed would increase the interest rate again, so the market will be mainly affected only by results of the ECB meeting.
If the ECB chooses not to increase the interest rate as expected and voices concern for the economy, it might pressure the euro to weaken and provide support for the dollar to strengthen.
If the baht weakens as a result, Poon expects it would test its resistance level of 36.80 to the dollar, while the support level would be around 36.30-36.40, the level importers are waiting for to purchase the dollar.
The market strategist advised investors to use hedging tools such as options to manage risks in a highly volatile currency market.
As the travel rebound continues to unfold, the benefits of tourism are spreading across the Asia Pacific. In Southeast Asia, particulary Thailand, Airbnb reveals that the resurgence in domestic and inbound tourism is empowering locals to earn a living and make ends meet.
In Thailand, some of the lesser-known destinations that travellers are exploring include Koh Lanta, Trat, Pai and Cha-am.
Domestically, more than 70 per cent of Thais polled plan to travel more frequently to rural destinations that are not currently popular with tourists, and over two-thirds polled say it is important that they are not contributing to issues such as over-tourism.
With people continuing to embrace flexible new approaches to travel and living, communities that have traditionally missed out in the past are increasingly well-positioned to secure a bigger slice of the tourism pie, according to the new Airbnb report ‘Further Afield: Spreading the Benefits of the Travel Revolution’.
Across the region, this has presented fresh opportunities for locals looking to supplement their income as they grapple with rising costs of living.
Across the Asia Pacific, Airbnb nights booked in non-urban areas and typical earnings for non-urban Hosts have increased. Travellers are not only eyeing destinations off the beaten path, but they’re also looking to stay longer.
Notably, nights booked for long-term stays (stays longer than 28 days) in non-urban areas approximately doubled in popular travel and remote working hotspot Thailand in Q2 2022, up from Q2 2019 pre-pandemic.
In Southeast Asia, a number of destinations outside major metropolitan hubs were popular among travellers on Airbnb for long-term stays in Q2 2022. Examples included:
Koh Pha Ngan, Koh Lanta and Krabi in Thailand
Ipoh, Kuah, Semenyih, and Port Dickson in Malaysia
Dapa, Panglao, Dumaguete and Silang in the Philippines
Mich Goh, Airbnb’s Head of Public Policy for Southeast Asia, India, Hong Kong and Taiwan, said: “More than two years since the start of the pandemic, we continue to see fundamental shifts in travel that are creating new opportunities for lesser known, off-the-beaten-track communities. It’s incredibly exciting to see travellers so enthusiastic about exploring new destinations, as well as the positive economic impact cascading to locals.”
This ongoing dispersal of travel is empowering locals to diversify their income through hosting and building financial resilience in the face of rising costs of living.
” We are committed to continuing to work together with governments and stakeholders to keep inspiring travellers to step off the beaten path and help ensure more communities can share in the benefits of tourism,” he said.
In addition to encouraging travellers to explore further afield through innovative search tools such as Categories and I’m Flexible, Airbnb remains committed to partnering with governments and communities in Southeast Asia.
The company is partnering with Thailand’s Tourism Authority of Thailand and Indonesia’s Ministry of Tourism and Creative Economy on a range of ‘Live and Work Anywhere’ initiatives to attract global digital nomads and remote workers, as part of broader efforts to drive inbound tourism as travel returns.
Central Department Store will invest THB15Bn for the next 5 years to reinforce its position as Thailand’s No.1 Omnichannel Retailer in Premium Segment
Central Department Store under Central Retail commemorates its 75 years of achievements as the pioneer and leader in the retail sector by unveiling a 15 billion Baht investment within 5 years (2023-2027) to strengthen its business.
The huge investment will be spent on branch expansions and store revamps to forge ahead as the No.1 omnichannel retailer in the premium segment.
Central expects its growth to be 1.7 times higher within 5 years. The retailer also unveils a 500 million Baht 75th Anniversary campaign, featuring a spectacular festival of happiness packed with fabulous and fun activities and events.
The “ALL AT CENTRAL” campaign will be full of surprises, exclusive promotions, and inspiring stories of the connection between Central and all customers. In keeping with its long-standing commitment to social responsibility, the celebration campaign, which will be held both on-site and online, also intends to increase local community involvement.
Through the grand festival, the company expresses gratitude to its loyal patrons who have made it Thailand’s top retailer for the past 75 years thanks to their unwavering support.
Olivier Bron, Chief Executive Officer — Department Store, under Central Retail, said, “From the very first day, Central never stops innovating and exploring new ways to create the best shopping experience for our valued customers. Under our vision to truly be “the department store for all the Thais,” we aim to be the ultimate destination for the authentic and sustainable Thai House of Brands, where customers can renew the experience of the best of Thai and international Fashion and Home”.
To sustain growth and reaffirm its position as Thailand’s No.1 department store, Central operates through six key strategies that include expanding its business with new store openings across Thailand, selecting only the best-in-class products and services, and building seamless online and offline shopping experiences.
The customer traffic at the department stores has increased by 25%, with a 50% surge in customer spending. The CENTRAL APP also enjoys a sale growth of 105% and reaches 5.2 million downloads in the first half of 2022.
The retailer also sees continuous growth in its Social Commerce Channels including Chat & Shop, Personal Shopper (Tel. 1425), Facebook Live, and Facebook Inbox.
“We remain committed to making our customers happy as they step into our stores. Central is home to happiness and good memories. To celebrate this huge milestone, we are joining hands with leading partners The1 Credit Card and MasterCard as well as top creators and artists to launch the mega ‘ALL AT CENTRAL’ campaign full of wonderful surprises. To reach the customers on multiple online and offline platforms and channels, we are implementing the 360-degree marketing strategy with the aim is to convey the “All Good Things Happen at Central” message. Through this 500-million-baht campaign, we want to thank our customers for letting us be a part of their happy memories. We stand firm in our support for the community, contributing to the sustainable growth of society. With this campaign, the stores will enjoy more traffic. We expect a 25% growth in sales and 80% campaign reach,” said the CEO.
7 surprises in the “ALL AT CENTRAL” campaign
To celebrate its 75th anniversary in festive grandeur, Central Department Store’s nationwide mega celebration campaign takes the form of 7 surprises under the concept of “ALL AT CENTRAL.” The joyful campaign promises to delight shoppers and tourists alike.
SURPRISE 1: ALL THE TIME with The Central Memory Bank Exhibition. Central brings its customers to the memory lane with the Central Memory Bank Exhibition, transporting them back in time by presenting the fond recollections of the department store that customers have shared, thus narrating the unique history of Central.
At the exhibition, celebrities will share their great memories and nostalgic products from Central.
This trip to the past is from 29 September to 6 November 2022 at the Central Space on the 3rd floor of Central the Original Store on Charoen Krung Road.
SURPRISE 2: ALL THE FUN with Central x Yuree. In collaboration with famous artist Yuree Kensaku, better known as “Yuree,” Central has created three adorable characters that reflect the success story of Central: Tiger (strength and courage), Dog (loyalty), and Platypus (longevity).
The three lovely pals are available as an exclusive Line Sticker Collection “CENTRAL 75th Anniversary” to mark the department store’s anniversary. Available for download via Central’s LINE Official Account @CentralOfficial until 28 September 2022, the three buddies are now ready to delight every LINE chatroom.
To bring the fun to the physical world, the three pals will turn into giant balloons from 8 September – 31 October 2022, under the Central Landmarks campaign.
SURPRISE 3: ALL THE EXPERIENCE with CENTRAL EDITION. To celebrate its anniversary with community engagement in mind, Central Department Store has joined hands with top Thai designers to create an exclusive collection of value-added products such as clothes and home accessories.
The collection incorporates local materials to promote the craftsmanship of the local communities. The collection will be available at Central Department Stores — Central Chiang Mai (from 7 October 2022), Central Ladprao (from 10 October 2022), Central Phuket (from 11 October 2022), Central Chidlom (25 October 2022) — and on the Central App.
SURPRISE 4: ALL THE STYLES with the RED & EXCLUSIVE COLLECTION. Central, the ultimate fashion destination, will launch the Red Collection, curating red products from leading fashion brands to celebrate the 75th anniversary in style. Additionally, the department store has collaborated with top beauty and fashion brands to design exclusive “Only at Central” products.
The limited collection will be available from 1 October 2022 at all Central branches and on the Central App.
SURPRISE 5: ALL THE TEAMS with 75th Central Shopping Bag Collection. Another unmissable experience is the launch of NFT “75th Central Shopping Bag Collection,” designed by collage artist Nakrob Moonmanas.
The collection marks the first of its kind in Southeast Asia’s retail industry. Packed with special promotions and privileges, the limited NFTs are collectible via “Central Collectibles” on The1 App until 31 October 2022.
SURPRISE 6: ALL THE HAPPINESS with THE NATIONAL CELEBRATION. Central Department Store has gone all out for the grand celebration to delight its customers with a campaign full of fun and exciting online and onsite activities.
Central will be painting the town red with the red lights by decorating its buildings and 10 branches, in Bangkok and other provinces.
The grand celebration also includes online and offline promotions as well as fun office activities for its employees that will run from 12 October – 1 November 2022.
SURPRISE 7: ALL THE DREAMS with SIGNATURE FLOWER SHOW AND MEGA PARTY. To bring its customers closer to the beauty of nature, Central is bringing back its signature flower festival to celebrate its anniversary in full bloom.
This year, the flower festival will run from 27 October 2022 onwards at 2 branches: Central @CentralWorld and Central Chidlom. ALL ABOUT YOU…because the customers are everything to Central Department Store
To top it off, Central will also release a special song entitled “EVERYTHING IS ALL YOU” written by Trai “Boy” Bhumiratna, produced by Notapol “Kor” Srichomkwan, and performed by Popetorn “Two” Soonthornyanakij. The song is a thank-you gift from Central to its loyal customers who have supported Central for over 75 years.
The beautiful song will be available on all Central’s social media platforms and listening platforms: LINE TV, APPLE MUSIC, JOOX, SPOTIFY, and TIDAL on 29 September 20222.
Bringing legacy to sustainable growth “Apart from putting our customers first in everything we do, we operate our business with a focus on sustainability, social contributions, and social responsibility. To mark our 75th anniversary, we are partnering with businesses under Central Group, partners, and customers, to build a truly sustainable society for the Thais. Through all activities held during the ‘ALL AT CENTRAL’ campaign, Central will raise funds for foundations that support health, women and children, as well as the environment including the Kidney Foundation of Thailand, UNICEF, The Foundation for The Welfare of The Mentally Retarded of Thailand Under The Royal Patronage Of H. M. The Queen, and Seub Nakhasathien Foundation,” stated Bron.
Creating the Store of the Future, built upon 7 decades of success Moving forward, Central is on a mission to become a legacy that never stops growing to serve its customers across generations.
To remain the No. 1 omnichannel retailer, we are investing over 15 billion baht within the next 5 years in new store openings and store transformations to create the ultimate lifestyle and happiness destinations. In 2023, Central will open 2 new department stores: one new Robinson Department Store and Central Westville.
Four department stores will go under major renovation: Central Chidlom, Central Ram Intra, Robinson Fashion Island, and Central Mega Bangna.
Next year, Central will also strengthen its online presence with the brand-new CENTRAL APP while also elevate its Social Commerce experience to the next level with the future launch of new shopping channels: TikTok Shop and Luxe Chat & Shop.
It also looks forward to creating the most personalized marketing strategy through campaigns that are designed to reach the right customers using insights and data, ensuring the best experience for its valued customers.
To lead in the retail industry, Central constantly adapts to the ever-changing needs of the customers. These past 75 years were proof of its achievements.
Central’s growth goes hand in hand with Thai people’s happiness. The retailer said it remains committed to being “Central to Life.”
“Central and Robinson are ready to continue our success towards sustainable development in all dimensions for business, society, economy, environment, and way of life to grow together. As the No.1 Retailer in Thailand, Central, holding the hearts and minds of Thai people for a long time, is ready to express gratitude to every trust, to give the best to important customers, and to stand by Thai people for 75 years and forever.” Bron concluded.
When someone mention cryptocurrency, Bitcoin is likely the first thing that comes to mind. However, there is another that is also gaining more spotlight, Ethereum or ETH, the 2nd largest cryptocurrency in term of marketcap.
Ethereum was founded by Vitalik Buterin and launched in 2015. Unlike Bitcoin, Ethereum blockchain supports Smart Contract which allow developers to create decentralized applications, leading to new innovations on the blockchain including Decentralized Finance, GameFi, Stablecoin, NFT and many more. Ethereum is considered the first of 2nd generation blockchain.
However, Ethereum still has its limitation which lead to the idea of developing Ethereum 2.0 that will enhance many functions including speed, decentralization, and security. In this article, we will learn more about why Ethereum aims to become 2.0 and how it plans to do so.
The Merge, First Step to Ethereum 2.0
The Merge is the event that is predicted to happen in September 2022. It is when Ethereum will finally change its consensus algorithm from Proof-of-Work (PoW) to Proof-of-Stake (PoS) which is widely used by new generation of blockchains.
The idea behind the Merge was dated back to 2020. During the time, Ethereum developers have created another blockchain called Beacon Chain which used PoS and allowing ETH holders to stake their ETH on the network to help secure and develop the network. When the network is ready, it will undergo a process called “The Merge” where Beacon Chain merges with Ethereum mainnet and changing mainnet’s consensus to PoS.
Why is changing to PoS important? Because Ethereum currently uses PoW to verify transaction on the network which requires mining or using computers to solve equations in order to create a block. Mining consumes huge amount of electricity, to make the matter worse, the bigger the blockchain the more competition between miners are, resulting in even more electricity wasted to run the network. There was a report that Ethereum consumes electricity almost 112 TwH/year which can be compared to the amount required by a small country in one year.
This is why PoS considered a game-changing for Ethereum, as it completely changes how the network process a transaction from running a mining rig to staking coins. ETH holders can stake their coins on the blockchain as collateral in order to be randomly selected by the system to validate a transaction and create a block, the validator then receives ETH as reward for performing the task correctly and with integrity. Without mining, Ethereum is predicted to be able to reduce its energy consumption by almost 99%.
Next Steps for Ethereum
While The Merge is just weeks away, it is actually the very first step to Ethereum 2.0 that will solve the energy consumption issue. The other issues which include transaction speed, decentralization, and security will be addressed in the next milestones with the rhyming names and details as followed:
The Surge
This step will introduce Sharding to the ecosystem. Sharding is the system that split information into smaller packages and distribute these packages to be processed by each node in blockhain, also known as Pararelle Processing. With this, Vitalik Buterin the co-founder believes that it could speed up the transaction time to 100,000 transactions per second compared to current speed at 15 – 20 transactions per second.
The Verge
This step will introduce “Verkle trees” and “Stateless clients” into Ethereum ecosystem allowing users to run a node without requiring to store an immense amount of data, which in turn is an incentive to increase the number of nodes, and ultimately leading to more decentralization.
The Purge
This step aims to cut down some unrelated historical data to free up spaces as well as to remove Technical Debts that were created during initial stage of development to ensure more sustainability of the network in the long-run.
The Splurge
The last step may consist of a bunch of minor upgrades to ensure that the previous big upgrades can work without any hiccups. Buterin described this part as “the fun stuff.”
Conclusion
The Merge is first step to Ethereum 2.0 which is predicted to occur during September 2022. This process will change Ethereum’s consensus algorithm from Proof-of-Work that consume an enormous amount of energy to Proof-of-Stake that can reduce energy consumption by 99%.
In addition, there more Ethereum’s upgrades planned for the near future, which are Surge, Verge, Purge and Splurge. These planned upgrades will offer more transaction speed, security, and decentralization for the 2nd largest cryptocurrency in the world, the Ethereum.
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*Cryptocurrency is highly risky; investors may lose all investment money. **Digital assets involve risks; investors should study information carefully and make investments according to own risk profile.
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