CoinDCX News, Crypto News Global

Top Crypto News Today: Will the Upcoming Ethereum Merge Change the Crypto Market Forever?

Top Crypto News Today: What Does The Merge Mean For The Crypto Space

The Ethereum ecosystem and its new upgrade from working with a Proof of Work consensus mechanism to a Proof of Stake consensus mechanism have the crypto space lurking around the ETH tokens! Any software upgrade is not usually deemed as a cause for celebration, however, in the crypto world, this Ethereum upgrade apparently is! 

The crypto platform Ethereum has been prepping for a major systems overhaul since 2020 that, among other things, would help in making it more energy efficient. Analysts and investors are of the opinion that the planned changeover, which we know as “the Merge” in crypto circles, is driving up the price of Ether, the in-house token of the Ethereum blockchain.

LiveMint reported that ‘As of 5 p.m. ET on Friday, the price of ether was up 87% from a low on June 18. Bitcoin, the only crypto bigger than Ether, was up about 20% in the same time frame, according to Dow Jones Market Data. The aggregate open interest of ether futures across exchanges—a measure of investors’ enthusiasm for the cryptocurrency—has surged since the start of July, according to data from The Block.

According to Katie Talati, the director of research at crypto asset manager Arca, The Ethereum Merge upgrade is a difficult technological undertaking in part. It is so because there are already thousands of decentralized applications with billions of dollars deposited in them running on the Ethereum blockchain.

Ethereum Merge and Crypto

To get a whole picture of the implication of Ethereum and how the Merge is playing a role in the future of all ETH holders, let us take a cumulative look. Ethereum is primarily a platform for developers to build and operate crypto applications, similar to IOS or Android. However, the difference lies in the fact that while IOS and Android apps are usually controlled by Apple or Google, these ETH applications are decentralized.

With the crypto market in the doldrums since peaking in November, some analysts and investors have viewed the Ethereum Merge upgrade as one of the few coming catalysts that could give a new boost to the market. 

The upgrade is called the Ethereum Merge because it is the merging of the current proof-of-work Ethereum blockchain and the proof-of-stake “Beacon Chain” created by Ethereum developers.

The famously known proof of work and proof of stake consensus mechanisms are both mechanisms that are used by the crypto networks to verify transactions and add them to the blockchain. While the proof-of-work model was pioneered by Bitcoin, where a decentralized network of computers solves complex mathematical puzzles to process transactions and earn rewards in the form of newly created BTC tokens. The process is energy-intensive because the network requires miners to run powerful machines 24/7.

On the other hand, the Proof of stake vs Proof of Work, allows users to participate in securing a network by putting their own crypto holdings on the line. In PoS, by locking up the coins, investors have a financial incentive to make sure transactions are valid.

Switching to the proof-of-stake model would likely make Ethereum a little faster, more secure, and energy-efficient. The Ethereum Foundation said in one of its publications that the change is expected to reduce Ethereum’s electricity usage by about 99.95%.

The newly upgraded Ethereum would function mostly the same for investors and traders. However, it is a little different story for miners who have invested in hardware to mine ether. For the miners, the Ethereum Merge upgrade could hurt as there will not be any need to intensive puzzle solving and energy consumption anymore. 

Kosala Hemachandra, CEO and founder of MyEtherWallet, said, “There are tons of miners and mining pools. They will immediately lose millions and millions of dollars of revenue when the merge happens”.

Source: LiveMint

Learn more about The Merge at ethereum.org 

Share this Story

Check Also

Binance U.S to bid for Voyager, CEO Changpeng Zhao confirms

Binance U.S aims to bid for Voyager Digital after FTX collapse. Zhao comments that he is a Canadian citizen and that should not be a problem for him acquiring Voyager’s assets.

GET ALL LATEST UPDATES ON YOUR EMAIL





    Categories

    Invest in Bitcoin, Ethereum, & other 200+ crypto assets.
    Download the app now, register & start with as low as Rs.100
    ios download link
    android download link
    qr code for download