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01-05-2022|Crypto

The Next Big Thing In Cryptoverse Could Be An Ether Merger.

Ether has a market capitalization of $363 billion, which is less than half that of bitcoin, and the two combined account for 60% of the cryptocurrency industry.

Ether has committed to do better in the future. It has vowed to take crypto to the next level, edging out competitors and even outshining bitcoin, the godfather. However, the clock is ticking.

The world's second-largest cryptocurrency was meant to be just weeks away from the "merge," a June upgrade to its blockchain Ethereum that would make it faster, 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 see ether mining move away from the energy-intensive proof-of-work method and toward proof-of-stake, has been postponed, disappointing investors.

Brendan Playford, creator and CEO of decentralised financial data platform Masa Finance, said, "The timescale for seeing this debut continues to expand."

"It's entirely possible that Ethereum's much-anticipated switch to a proof-of-stake system may be postponed once more, given how hard the change is and how uncertain it is that it can actually deliver on its promise of cheaper transaction fees and faster 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 postponed as testing proceeded. This month, it has dropped 13% to $2,844.

Mr Beiko stated in his tweet, "It won't be June, but probably a few months later." "We don't have a clear date yet, but we're definitely nearing the end."

The actual date of the merge, in which Ethereum's EH1 chain will merge with a new chain to become ETH2, is unknown, although many cryptocurrency experts believe it to happen this year. Beiko has not responded to requests for comment on Twitter or LinkedIn.

Ether has a market valuation of $363 billion, which is less than half that of bitcoin, and the two combined account for 60% of the crypto market.

Bitcoin, on the other hand, remains merely an investment with no genuine ability to be utilised for decentralised finance contracts. As a result, many investors feel a market flipping - called "the flippening" in crypto circles - is inevitable, with the merger acting as a trigger for Ethereum to become the dominant platform.

"Funds are moving into Ethereum in anticipation of the merge, even if we don't know when it will happen," said Noelle Acheson, head of market analytics at Genesis Trading. "It appears that more funds are appreciating that (Ethereum) is perhaps undervalued at this stage," she said of the buying appetite.

The proof-of-work (POW) method is used to mine bitcoin and ether, in which thousands of miners, or network nodes, compete to solve complicated mathematical riddles.

This is a hugely energy-hungry process that produces enough pollution to pollute a small country every year, fueling concerns about crypto in a low-carbon world.

Rather than having millions of computers racing to solve problems, the alternative proof-of-stake (POS) mechanism relies on nodes that stake the most coins to validate transactions.

The speed and processing costs of Ethereum have long been a stumbling block. As a proof-of-work blockchain, it can only handle 30 transactions per second, but if it switches to POS, it plans to execute 100,000 transactions per second.

This will help it to compete with smaller cryptocurrencies like Solana and Cardano, which leverage POS for decentralised finance applications including trading, investing, borrowing, and even non-fungible tokens.

That is, assuming Ethereum receives an upgrade.

"Ethereum maxis, or people who believe in 'the flippening,' believe it will happen soon," Genesis Trading's Acheson said. "However, it is simply a theory, and only time will tell."

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