Cryptoverse Ether’s market capitalization of $363 billion is less than half that of bitcoin, and the two together account for 60% of the crypto market.
Ether has committed to do better in the future. It has vowed to take things to the next level, pushing off crypto competitors and even outshining the godfather, bitcoin. However, the clock is ticking.
The number two cryptocurrency was meant to be weeks away from the “merge,” a dramatic June update to its blockchain Ethereum that would make it quicker, cheaper, and less power demanding, promising a meaner and cleaner crypto future.
Even while bitcoin was hampered by inflation and monetary tightening, ether was buoyed by expectation this year. However, the merger, which would shift ether mining away from the energy-intensive proof-of-work approach and toward proof-of-stake, has been postponed, disappointing investors.
“The timescale for seeing this debut continues to be extended,” said Brendan Playford, founder and CEO of Masa Finance, a decentralized financial data platform.
“It’s very possible that Ethereum’s highly anticipated shift to a proof-of-stake system may be postponed again, considering how hard this change is and how dubious it is about whether it can truly deliver on its promise of cutting costs and boosting transaction speeds.”
On April 11, ether declined 8% from $3,215 to $2,947, the day Ethereum principal developer Tim Beiko announced on Twitter that the June deployment had been put back while testing proceeded. This month, it is down 13% to $2,844.
“It won’t be in June, but more likely in the months following,” Mr Beiko stated in his tweet. “There’s no set date yet, but we’re clearly nearing the end.”
The timetable of the merging – Ethereum’s EH1 chain will unite with a new chain to become ETH2 – is unknown, although many cryptocurrency experts believe it will happen this year. Beiko did not respond to requests for comment on Twitter or LinkedIn.
THE FLIPPENING & THE MERGE
Ether’s market valuation of $363 billion is less than half that of bitcoin, and the two combined account for 60% of the crypto market.
Nonetheless, bitcoin is only an investment with no genuine capacity to be utilized for contracts in decentralized financial applications. As a result, many investors feel a market flipping – called “the flippening” in crypto circles – is unavoidable, with the merger serving as a trigger for Ethereum to become the dominant platform.
“We’re seeing money move into Ethereum in anticipation of the merger, even if we don’t know when it will happen,” said Noelle Acheson, head of market analytics at Genesis Trading. She said that the purchasing interest “hints that more funds seem to be realizing that (Ethereum) is potentially cheap at this time.”
Both bitcoin and ether are created via a proof-of-work (POW) system in which thousands of miners, or network nodes, compete to solve complicated mathematical riddles.
This is a tremendously power-hungry process that is projected to pollute the environment more than a small nation per year, fueling concerns about crypto in a low-carbon future.
The alternative proof-of-stake (POS) technique consumes far less power because, rather than having millions of computers racing to solve problems, it enables nodes with the most coins staked to authenticate transactions.
Ethereum has long been hampered by speed and processing cost constraints. As a proof-of-work blockchain, it only processes 30 transactions per second, but it aims to handle up to 100,000 transactions per second once it transitions to POS.
This would let it to compete with other, smaller cryptocurrencies like Solana and Cardano, which leverage POS in part or wholly for decentralized financial applications including trading, investing, borrowing, and even non-fungible tokens.
That is, if Ethereum receives an update.
“Ethereum maxis, individuals who believe in ‘the flippening,’ think it will happen very soon,” Acheson of Genesis Trading said. “However, it is simply a hypothesis, and much remains to be seen.”