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Ethereum’s big proof-of-stake blockchain switch could happen on September 15th. Will it become more energy-efficient?
The Ethereum network has been on a years-long path to switch its energy-hungry proof-of-work blockchain to a more efficient proof-of-stake system, and now its developers are suggesting a date to make the switch. The world’s second-biggest cryptocurrency Ethereum (ETH) climbed as high as US$1,927 on Thursday, marking its highest level since early June, according to data from CoinMetrics. The token was last trading at US$1,901.69, up 4.4% on the day. The highly anticipated ETH Merge upgrade is considered to be one of the biggest upgrades that the crypto market will see, but earlier predictions around the Merge scared most ETH investors that denoted that the Merge protocol will be yet another failure like Terra 2.0, given the current predicaments of the market and of the crypto investment community. Since the announcement, ETH rose above 50%, quickly recovering from the sharp market decline. Now, analysts await Ethereum to reach US$2,500, if the Merge upgrade is successful. As the big event is coming closer, the crypto market is prepping to experience increasing values.
Ethereum’s Triple-Halving Event to Promote Instant Price Surge
As per expert predictions, the launch of the Merge upgrade will trigger a triple-halving event for the crypto. They believe that since BTC has mostly reacted positively to halving, it is also likely that Ethereum value will also surge instantly, given the two are quite closely related. Now, let’s dive in deep to understand the ‘triple-halving event’ and the reason behind its importance to raise the value of Ethereum.
When the Ethereum network turns to the PoS consensus mechanism after the Merge upgrade is launched, the ETH supply will decline by approximately 80% to 90% through a process called ‘burning’ and generating ‘deflationary pressure’ on the network, which is equal to halving the Bitcoin system three times, this is the ‘triple-halving’ for Ethereum. The crypto’s EIP-1599 protocol, also known as the Ethereum London fork, accompanied by the PoS consensus algorithm will drastically reduce the issuance of ETH. After this development, the demand for Ethereum is expected to dramatically increase in the upcoming months.
Reasons Why Ethereum Outperforms Bitcoin in a Long Run
To begin with, Ethereum and bitcoin, are two different cryptocurrencies that work at different paces. Bitcoin is often seen as a store of value, an asset that could even compete with gold and other pricey commodities. On the other hand, Ethereum stands as the backbone of the cryptocurrency market and serves as a major exchange medium. But that too has its downside. A higher proportion of ether tokens face severe volatility compared to bitcoin.
Recently, the cryptocurrency industry was hit hard by a liquidity shock that originated in the derivatives market. Although all the digital currencies faced the storm, bitcoin was the most affected. But ether made a remarkable stand and hung on while bitcoin slipped. The on-screen liquidity of the bitcoin market is high due to investors who invest their money in bitcoin when it is on a spike and pull it out when the market faces small crashes. This caused shocks to reverberate across the industry.
But Ethereum is often out of these risks. Its lack of reliance on derivatives markets to transfer or warehouse has fixed it as a stable investment and trading source. Besides, Ethereum also sees a higher number of transactions on the public blockchain than bitcoin does. Ethereum’s active development team has contributed greatly to pushing the technological boundaries to accommodate smart contracts.
So, when should you buy Ethereum?
Based on expert perspectives, Ethereum 2.0 is supposed to establish a stronghold for the crypto in the Defi and Web 3.0 industry, leaving little room for Bitcoin to reign as the largest cryptocurrency in the world. There are plenty of assumptions revolving around the market that depict the Merge upgrade will fail to appease investors, but its current price rally proves quite otherwise. According to Hayes, ETH is currently providing massive investment opportunities for buyers, hence, now will be a good time for investors to buy and hold the token to generate massive amounts of profits in the future.
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