After several years of delay and many tests, what is considered the greatest revolution in the universe of cryptocurrencies has been completed and promises to relaunch the value of Ethereum. These are the main keys.
Ethereum’s working system upgrade completed today, known as the merger, is one of the most anticipated events in the history of the crypto industrysince it is the first time that an operation of this type has been carried out.
According to Belén San José, co-founder and CEO of pecunia256, the new software will allow to make a more efficient and more scalable network. The new network, which Ethereum will adopt, will change many things, such as the reward to miners.
What has the change consisted of?
The second most popular cryptocurrency in the world has changed his way of working, of obtaining new coins. You have migrated your system from the Proof-of-Work model to the Proof-of-Stake model
The model that was used until now worked through a cryptographic code, created by each Ethereum “miner”, who competed with others for try to solve the code and for which you were rewarded with new coins. The expensive equipment used consumes high levels of electricity to perform these complex mathematical calculations.
On the contrary, the new Proof-of-Stake model creates a network secured by validators who lock their Ethereum in exchange for the right to validate blocks and earn commissions, but do not generate new coins. The new system reduces the amount of equipment needed to maintain the blockchain. The “crypto miners & rdquor; they are replaced by a smaller number of “validators” of the transaction.
This new model is considered more ecological, since it consumes less energy. The change is expected to save a large amount of energy per year. But, in addition, it is a system that will boost the value of Ethereum, since new ones cannot be created. As the Proof-of-Stake model reduces the amount of coins given as rewards (which is how digital currencies are generated), the project managers say that the total amount of existing currencies will decrease.
Specifically, the supply of Ethereum could become deflationary by 1.5% per year. This means that the emission will be lowered, which could also cause the price in dollars to rise, according to Justin Drake, an Ethereum researcher. In fact, some forecasts suggest that, thanks to this change, Ethereum will overtake Bitcoin as the world’s largest currency by market capitalization.
Regarding its behavior on the stock market, Ethereum took off at the beginning of 2021 and, since then, along with the rest of the great cryptocurrencies, has suffered the blow of the circumstances that this year are hitting the market, such as the Ukraine conflict, the energy crisis and inflation. But there are predictions they point out that it could return to 4,500 dollars at the end of the yearat levels at which it was trading at the end of last year.