While there are people searching for ‘What is Crypto Winter’ Ethereum has sustained inflows for 3 consecutive weeks after an 11-week outflow of the asset. After the long period of resistance, the 3-week support gained by the 2nd top crypto asset is plausible with the transformation of Ethereum from ‘Proof of Work’ to ‘Proof of Stake’ due next month.
While Ethereum is gaining momentum in the crypto market, Bitcoin has been bleeding outflows totalling $1.7 million with its value swaying a little above $19,000. The statistics show that the king crypto has been shorted at a volume of $ 6.3 million last week.
Multi-asset investments that invest in altcoins saw a spike of $ 2.2 million in inflows last week. Altcoins in comparison have seen outflows worth $ 0.3 million.
Ethereum’s merge from ‘Proof of Work’ to ‘Proof of Stake’ has been the most anticipated event in the crypto realm. The upgrade will be a huge milestone for the asset as well as the Ethereum community. According to crypto analysts, Ethereum 2.0 upgrade may decrease the gas fee on the chain making it more viable for adoption.
Amidst a bear market, some institutional entitles have invested in Bitcoin with the purpose to adopt it as a method of payment. With Ethereum approaching its 2.0 upgrade, BTC may fall behind as the upgraded blockchain network may project a better store of value and a better store of exchange, given the fact that the new consensus mechanism will reduce the gas fee and the transaction per second of the blockchain.
Source: The Daily HODL
Additional: Guide to Ethereum Merge Update
Ethereum 2.0 upgrade will merge the existing blockchain from a ‘Proof of Work’ consensus mechanism to a ‘Proof of Stake’. The blockchain is being upgraded to enhance scalability and performance. Some people refer ‘Ethereum 2.0’ as ‘Serenity’ or ‘Eth2’.
‘Proof of Work’ is the original consensus mechanism for the Ethereum blockchain. In PoW, a miner needs to solve complex problems using high GPU computing power to mine blocks. Once the block is mined and added to the blockchain, the miner receives a reward in the native token of the blockchain. A miner on the Ethereum blockchain will receive ETH as a ‘block reward’.
In ‘Proof of Stake’ mechanism, token holders validate transactions on the Ethereum 2.0 blockchain. Ethereum 2.0 has adopted ‘Sharding’ as a ‘Proof of Stake’ concept. In Eth2, validators on the blockchain need to validate transactions within a specific given time to be eligible for a reward claim.
Additional Read: Proof of Work vs Proof of Stake
The Ethereum community has always been irked about the high gas fee and problems with the scalability and speed of the blockchain. It has also resulted in users moving to other technologies for better scalability and speed.
The upgrade was etched out to make the blockchain scalable as Ethereum’s original version has throughput challenges making it difficult for developers to scale dApps.
With the new upgrade, Ethereum will be able to retain its existing ecosystem of investors and developers.
Source: Planet Compliance
Additional Read: Ethereum (ETH) Price Prediction