Home Ethereum Ethereum Merger: Ether Price Surpasses Bitcoin As Anticipation Grows For Software Upgrade

Ethereum Merger: Ether Price Surpasses Bitcoin As Anticipation Grows For Software Upgrade

Ethereum Merger: Ether Price Surpasses Bitcoin As Anticipation Grows For Software Upgrade

Ether once again outperforms its better-known rival, Bitcoin, as optimism over a long-sought update that promises to reduce the carbon footprint of the world’s most widely used blockchain appears to be one step closer to fruition.

Ether, the native cryptocurrency of the Ethereum blockchain, is up over 16% in the past seven days, while Bitcoin is up 8.4%. So far this year, Ether is down around 17% and Bitcoin is down around 7%.

The latest episode of outperformance comes as anticipation builds for the biggest software upgrade in Ethereum’s eight-year history. Called the merger and expected in a few months, it will change the way transactions on Ethereum are ordered, helping the network consume less electricity and run more efficiently.

The developers have been promising the upgrade for years. The last test of this software before the merger was triggered began on March 15, and after some initial issues such as error messages, appears go smoothly.

“The ETH merger on ‘Kiln testnet’ has allowed ETH to outperform the market,” said Teong Hng, co-founder and managing director of Hong Kong-based Satori Research. “It is considered an upgrade in terms of transaction validations in Ethereum. The merger was successful with no major issues reported.

Ether jumped as much as 4.8% on Tuesday in Asia, hitting its highest level since Feb. 17 and trading at $3,043 as of 12:38 p.m. in Hong Kong. Bitcoin also rebounded, rising 4.9% to $43,144.

Not only will the new software likely make Ethereum more attractive to environmentally conscious investors, it could also reduce the supply of Ether in circulation.

After the merger, the Ethereum network will stop using millions of powerful servers called miners to order transactions on the blockchain. Instead, people will be able to put their Ethers into special staking wallets, which will be used to order trades – a system called Proof of Stake. Stakeholders will not be able to withdraw their coins until at least another software update, expected approximately six months after the merger.

They will also be less likely than miners to sell newly minted coins they receive as a reward for participating because they don’t have as high operating costs as power-hungry miners, Kyle Samani said. co-founder of Multicoin Capital. After the merger, Ethereum’s power consumption is expected to drop by 99%.

The merger was supposed to happen months ago, but was delayed as Ethereum developers worked to make sure everything went smoothly. The entire Ethereum economy, including $349 million in Ether, as well as billions of decentralized finance applications and non-fungible tokens depend on it. The Ethereum Foundation has officially planned for the merger to occur in the second quarter 2022but had recently stated in a Blog that the exact timing has not been determined – a possible sign of a small delay.

“It would take a catastrophic event for that not to happen this year,” Tim Beiko, a computer scientist who coordinates Ethereum developers, told Bloomberg. Still, some miners expect the merger to be pushed back to the fall.

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